ý | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware (State or other jurisdiction of incorporation or organization) | 20-2164234 (I.R.S. Employer Identification No.) | |
Title of each class: | Name of each exchange on which registered: | |||
Common Stock, par value $0.001 per share | The NASDAQ Global Select Market | |||
Large accelerated filer o | Accelerated filer ý | Non-accelerated filer o (do not check if a smaller reporting company) | Smaller reporting company o | Emerging growth company o | ||||
• | our expectations regarding future trends, expectations, and performance of our business; |
• | our belief that we have sufficient liquidity to fund our business operations during the next twelve months; |
• | our expectations about the impact of our strategic plans; and |
• | our expectations regarding our level of capital expenditures in 2018 |
December 31, 2016 | Opened | Closed/Transferred(1) | December 31, 2017 | ||||||||||
Americas | |||||||||||||
United States | 174 | 2 | 15 | 161 | |||||||||
Canada | 10 | — | 1 | 9 | |||||||||
Puerto Rico | 6 | — | 1 | 5 | |||||||||
Total Americas | 190 | 2 | 17 | 175 | |||||||||
Asia Pacific | |||||||||||||
Korea | 87 | 4 | 5 | 86 | |||||||||
China | 79 | 9 | 46 | 42 | |||||||||
Japan (2) | 44 | — | 24 | 30 | 20 | ||||||||
Hong Kong | 17 | 1 | 3 | 15 | |||||||||
Singapore | 18 | — | 4 | 14 | |||||||||
Australia (2) | 13 | — | 4 | 9 | |||||||||
United Arab Emirates | 12 | 1 | 13 | — | |||||||||
Total Asia Pacific | 270 | 15 | 99 | 186 | |||||||||
Europe | |||||||||||||
Russia | 36 | 1 | 1 | 36 | |||||||||
Germany | 18 | — | 3 | 15 | |||||||||
France | 10 | — | — | 10 | |||||||||
Austria | 6 | — | — | 6 | |||||||||
Netherlands | 5 | 1 | 2 | 4 | |||||||||
Spain | 5 | — | 1 | 4 | |||||||||
Great Britain | 7 | — | 4 | 3 | |||||||||
Finland | 4 | — | 1 | 3 | |||||||||
Other | 7 | — | 2 | 5 | |||||||||
Total Europe | 98 | 2 | 14 | 86 | |||||||||
Total | 558 | 19 | 130 | 447 | |||||||||
• | Strengthen our brand globally; |
• | Focus on relevant geographies and markets, product innovation and profitable new growth platforms while maintaining demand for our current offerings; |
• | Effectively manage our company-operated retail stores (including closures of existing stores) while meeting operational and financial targets at the retail store level; |
• | Successfully implement our previously identified $75 to $85 million annual selling, general and administrative reduction plan; |
• | Accurately forecast the global demand for our products and the timely execution of supply chain strategies to deliver product around the globe efficiently based on that demand; |
• | Use and protect the Crocs brand and our other intellectual property in new markets and territories; |
• | Achieve and maintain a strong competitive position in new and existing markets; |
• | Attract and retain qualified wholesalers and distributors; |
• | Consolidate our distribution and supply chain network to leverage resources and simplify our fulfillment process; and |
• | Execute multi-channel advertising and marketing campaigns to effectively communicate our message directly to our consumers and employees. |
• | Changes in foreign currency exchange rates relative to the USD could have a material impact on our reported financial results. |
• | Slower consumer spending may result in our inability to maintain or increase our sales to new and existing customers, cause reduced product orders or product order cancellations from wholesale accounts that are directly impacted by fluctuations in the broader economy, difficulties managing inventories, higher discounts, and lower product margins. |
• | If consumer demand for our products declines, we may not be able to profitably establish new retail stores, or continue to operate existing stores, due to higher fixed costs of the retail business. |
• | A decrease in credit available to our wholesale or distributor customers, product suppliers and other service providers, or financial institutions that are counterparties to our credit facility or derivative instruments may result in credit pressures other financial difficulties or insolvency for these parties, with a potential adverse impact on our ability to obtain future financing, our business and our financial results. |
• | If our wholesale customers experience diminished liquidity, we may experience a reduction in product orders, an increase in customer order cancellations, and/or the need to extend customer payment terms which could lead to larger balances and delayed collection of our accounts receivable, reduced cash flows, greater expenses for collection efforts, and increased risk of nonpayment by our wholesalers. |
• | If our manufacturers or other parties in our supply chain experience diminished liquidity, and as a result are unable to fulfill their obligations to us, we may be unable to provide our customers with our products in a timely manner, resulting in lost sales opportunities or a deterioration in our customer relationships. |
Location | Reportable Operating Segment | Use | Approximate Square Feet | Expiration (1) | ||||
León, Mexico (2) | Other Businesses | Manufacturing/warehouse | 392,000 | Mar 2019 | ||||
Ontario, California | Americas | Warehouse | 339,000 | Mar 2019 | ||||
Rotterdam, the Netherlands | Europe | Warehouse | 174,000 | Dec 2021 | ||||
Narita, Japan | Asia Pacific | Warehouse | 156,000 | Apr 2019 | ||||
Niwot, Colorado | Americas | Corporate headquarters and regional office | 98,000 | Jun 2021 | ||||
Padova, Italy | Other Businesses | Manufacturing/warehouse/office | 45,000 | Sep 2018 | ||||
Hoofddorp, the Netherlands | Europe | Regional office | 31,000 | May 2020 | ||||
Shenzhen, China | Asia Pacific | Regional office | 22,000 | Mar 2018 | ||||
Singapore | Asia Pacific | Regional office | 17,000 | Dec 2018 | ||||
Westwood, Massachusetts | Americas | Global commercial center | 16,000 | Sep 2021 | ||||
Shanghai, China | Asia Pacific | Regional office | 13,000 | Jul 2018 | ||||
Tokyo, Japan | Asia Pacific | Regional office | 13,000 | Oct 2018 | ||||
2017 | High | Low | ||||||
First quarter | $ | 7.54 | $ | 6.26 | ||||
Second quarter | 7.81 | 5.93 | ||||||
Third quarter | 9.85 | 7.42 | ||||||
Fourth quarter | 13.34 | 8.64 | ||||||
2016 | High | Low | ||||||
First quarter | $ | 10.16 | $ | 8.09 | ||||
Second quarter | 11.50 | 7.63 | ||||||
Third quarter | 12.54 | 8.02 | ||||||
Fourth quarter | 8.99 | 6.70 | ||||||

Issuer Purchases of Equity Securities | ||||||||||||||
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) | Maximum Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs | ||||||||||
October 1-31, 2017 | 1,306,409 | $ | 9.86 | 1,306,409 | $ | 78,777,549 | ||||||||
November 1-30, 2017 | 556,763 | 10.69 | 556,763 | 72,825,981 | ||||||||||
December 1-31, 2017 | 372,549 | 10.82 | 372,549 | 68,796,140 | ||||||||||
Total | 2,235,721 | $ | 10.22 | 2,235,721 | $ | 68,796,140 | ||||||||
Year Ended December 31, | |||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||
(in thousands, except per share data) | |||||||||||||||||||
Revenues | $ | 1,023,513 | $ | 1,036,273 | $ | 1,090,630 | $ | 1,198,223 | $ | 1,192,680 | |||||||||
Cost of sales | 506,292 | 536,109 | 579,825 | 603,893 | 569,482 | ||||||||||||||
Restructuring charges (1) | — | — | — | 3,985 | — | ||||||||||||||
Gross profit | 517,221 | 500,164 | 510,805 | 590,345 | 623,198 | ||||||||||||||
Gross margin | 50.5 | % | 48.3 | % | 46.8 | % | 49.3 | % | 52.3 | % | |||||||||
Selling, general and administrative expenses | 494,601 | 503,174 | 559,095 | 565,712 | 549,154 | ||||||||||||||
Selling, general and administrative expenses as a % of revenues | 48.3 | % | 48.6 | % | 51.3 | % | 47.2 | % | 46.0 | % | |||||||||
Restructuring charges (1) | — | — | 8,728 | 20,532 | — | ||||||||||||||
Asset impairments (2) | 5,284 | 3,144 | 15,306 | 8,827 | 10,949 | ||||||||||||||
Income (loss) from operations | $ | 17,336 | $ | (6,154 | ) | $ | (72,324 | ) | $ | (4,726 | ) | $ | 63,095 | ||||||
Income (loss) before income taxes | $ | 18,180 | $ | (7,213 | ) | $ | (74,744 | ) | $ | (8,549 | ) | $ | 59,959 | ||||||
Income tax expense (benefit) | 7,942 | (9,281 | ) | (8,452 | ) | 3,623 | (49,539 | ) | |||||||||||
Net income (loss) | 10,238 | (16,494 | ) | (83,196 | ) | (4,926 | ) | 10,420 | |||||||||||
Dividends on Series A convertible preferred stock | (12,000 | ) | (12,000 | ) | (11,833 | ) | (11,301 | ) | — | ||||||||||
Dividend equivalents on Series A convertible preferred shares related to redemption value accretion and beneficial conversion feature | (3,532 | ) | (3,244 | ) | (2,978 | ) | (2,735 | ) | — | ||||||||||
Net income (loss) attributable to common stockholders | $ | (5,294 | ) | $ | (31,738 | ) | $ | (98,007 | ) | $ | (18,962 | ) | $ | 10,420 | |||||
Net income (loss) per common share: | |||||||||||||||||||
Basic | $ | (0.07 | ) | $ | (0.43 | ) | $ | (1.30 | ) | $ | (0.22 | ) | $ | 0.12 | |||||
Diluted | $ | (0.07 | ) | $ | (0.43 | ) | $ | (1.30 | ) | $ | (0.22 | ) | $ | 0.12 | |||||
Weighted average common shares: | |||||||||||||||||||
Basic | 72,255 | 73,371 | 75,604 | 85,140 | 87,989 | ||||||||||||||
Diluted | 72,255 | 73,371 | 75,604 | 85,140 | 89,089 | ||||||||||||||
Cash provided by (used in) operating activities | $ | 98,264 | $ | 39,754 | $ | 9,698 | $ | (11,651 | ) | $ | 83,464 | ||||||||
Cash used in investing activities | (10,972 | ) | (18,657 | ) | (18,627 | ) | (57,992 | ) | (69,758 | ) | |||||||||
Cash provided by (used in) financing activities (3) | (65,370 | ) | (16,443 | ) | (101,260 | ) | 23,431 | (1,161 | ) | ||||||||||
December 31, | |||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||
(in thousands) | |||||||||||||||||||
Cash and cash equivalents | $ | 172,128 | $ | 147,565 | $ | 143,341 | $ | 267,512 | $ | 317,144 | |||||||||
Inventories | 130,347 | 147,029 | 168,192 | 171,012 | 162,341 | ||||||||||||||
Working capital | 268,031 | 276,335 | 278,852 | 441,523 | 453,149 | ||||||||||||||
Total assets | 543,695 | 566,390 | 608,020 | 806,931 | 875,159 | ||||||||||||||
Long-term liabilities | 18,379 | 17,966 | 19,294 | 27,849 | 63,487 | ||||||||||||||
Total stockholders' equity | 185,865 | 220,383 | 245,972 | 452,518 | 624,744 | ||||||||||||||
• | Consumer spending preferences continue to shift toward e-commerce and away from brick and mortar stores. This has resulted in continued sales growth in our e-commerce channel, as well as on various e-tail sites operated by wholesalers, and contributed to declining foot traffic in our retail locations. |
• | We anticipate lower retail revenues and selling, general and administrative expenses (“SG&A”) as we close less productive stores as leases expire and transfer select company-operated stores to distributors. Distributor revenues are reported within our wholesale channel. |
• | A cautious retail environment may negatively affect customer purchasing trends. |
• | Foreign exchange rate volatility may continue to impact our reported U.S. Dollar results from our foreign operations. |
• | In 2017 we identified annual reductions in SG&A in the amount of $75 to $85 million which, once implemented, are projected to generate an annual $30 to $35 million improvement in earnings before interest and taxes by 2019, compared to 2016. We achieved approximately $23 million of these SG&A reductions in 2017 while incurring approximately $10 million of costs to re-set our variable compensation. We remain on track to achieve the targeted SG&A reductions by 2019. We incurred $11 million in non-recurring charges to achieve these SG&A reductions in 2017 and expect to incur approximately $5 million in non-recurring charges in 2018, for a total of $16 million of non-recurring charges associated with our SG&A reduction plan. We reduced our company-operated retail stores in 2017 by 111 and anticipate an additional reduction of approximately 50 company-operated retail stores in 2018, thereby reducing our total store count to approximately 400 from 558 over a two year period. The majority of company-operated store closures are occurring as store leases expire. |
• | We sold 57.9 million pairs of shoes worldwide, an increase of 3.1% from 56.1 million pairs in 2016. |
• | Gross margin improved 220 basis points compared to 2016 to 50.5% for the year ended December 31, 2017. We drove this improvement by continuing to prioritize high margin molded product, improving our go to market capabilities, and better managing promotions. |
• | SG&A was $494.6 million, a decrease of $8.6 million, or 1.7%, compared to 2016. This includes the effects of $17.0 million in non-recurring charges and approximately $10 million of incremental costs related to variable compensation in 2017. |
• | Income from operations improved by $23.5 million, after incurring approximately $17.0 million in non-recurring charges, for the year ended December 31, 2017 compared to last year’s loss of $6.2 million. |
• | Net loss attributable to common stockholders improved $26.4 million to a loss of $5.3 million compared to a loss of $31.7 million in 2016. Basic and diluted net loss per common share was $0.07 for the year ended December 31, 2017, compared to a loss of $0.43 per common share for the year ended December 31, 2016. |
• | We continued to focus on improving the efficiency and effectiveness of our operations, including carefully managing and reducing our retail fleet, especially full-priced retail stores, and focusing on enhancing the profitability of this channel. During the year ended December 31, 2017, we opened a total of 19 stores and closed or transferred to distributors 130 stores for a net reduction of 111 company-operated retail stores. |
• | We continued to focus on simplifying our product line and disciplined inventory management to allow investment in higher margin, faster-turning product and reduced our inventory by $16.7 million, or 11.3%, from $147.0 million to $130.3 million. |
• | During 2017, we repurchased 5.7 million shares of common stock at an aggregate cost of $50.0 million. |
Year Ended December 31, | $ Change | % Change | |||||||||||||||||||||||
2017 | 2016 | 2015 | 2017-2016 | 2016-2015 | 2017-2016 | 2016-2015 | |||||||||||||||||||
(in thousands, except per share data, margin, and average selling price data) | |||||||||||||||||||||||||
Revenues | $ | 1,023,513 | $ | 1,036,273 | $ | 1,090,630 | $ | (12,760 | ) | $ | (54,357 | ) | (1.2 | )% | (5.0 | )% | |||||||||
Cost of sales | 506,292 | 536,109 | 579,825 | 29,817 | 43,716 | 5.6 | % | 7.5 | % | ||||||||||||||||
Gross profit | 517,221 | 500,164 | 510,805 | 17,057 | (10,641 | ) | 3.4 | % | (2.1 | )% | |||||||||||||||
Selling, general and administrative expenses | 494,601 | 503,174 | 567,823 | 8,573 | 64,649 | 1.7 | % | 11.4 | % | ||||||||||||||||
Asset impairments | 5,284 | 3,144 | 15,306 | (2,140 | ) | 12,162 | (68.1 | )% | 79.5 | % | |||||||||||||||
Income (loss) from operations | 17,336 | (6,154 | ) | (72,324 | ) | 23,490 | 66,170 | 381.7 | % | 91.5 | % | ||||||||||||||
Foreign currency gain (loss), net | 563 | (2,454 | ) | (3,332 | ) | 3,017 | 878 | 122.9 | % | 26.4 | % | ||||||||||||||
Interest income | 870 | 692 | 967 | 178 | (275 | ) | 25.7 | % | (28.4 | )% | |||||||||||||||
Interest expense | (869 | ) | (836 | ) | (969 | ) | (33 | ) | 133 | (3.9 | )% | 13.7 | % | ||||||||||||
Other income | 280 | 1,539 | 914 | (1,259 | ) | 625 | (81.8 | )% | 68.4 | % | |||||||||||||||
Income (loss) before income taxes | 18,180 | (7,213 | ) | (74,744 | ) | 25,393 | 67,531 | 352.0 | % | 90.3 | % | ||||||||||||||
Income tax expense | 7,942 | 9,281 | 8,452 | 1,339 | (829 | ) | 14.4 | % | (9.8 | )% | |||||||||||||||
Net income (loss) | 10,238 | (16,494 | ) | (83,196 | ) | 26,732 | 66,702 | (162.1 | )% | (80.2 | )% | ||||||||||||||
Dividends on Series A convertible preferred stock | (12,000 | ) | (12,000 | ) | (11,833 | ) | — | (167 | ) | — | % | (1.4 | )% | ||||||||||||
Dividend equivalents on Series A convertible preferred shares related to redemption value accretion and beneficial conversion feature | (3,532 | ) | (3,244 | ) | (2,978 | ) | (288 | ) | (266 | ) | (8.9 | )% | (8.9 | )% | |||||||||||
Net loss attributable to common stockholders | $ | (5,294 | ) | $ | (31,738 | ) | $ | (98,007 | ) | $ | 26,444 | $ | 66,269 | 83.3 | % | 67.6 | % | ||||||||
Net loss per common share: | |||||||||||||||||||||||||
Basic | $ | (0.07 | ) | $ | (0.43 | ) | $ | (1.30 | ) | $ | 0.36 | $ | 0.87 | 83.7 | % | 66.9 | % | ||||||||
Diluted | $ | (0.07 | ) | $ | (0.43 | ) | $ | (1.30 | ) | $ | 0.36 | $ | 0.87 | 83.7 | % | 66.9 | % | ||||||||
Gross margin (1) | 50.5 | % | 48.3 | % | 46.8 | % | 220bp | 150bp | 4.6 | % | 3.2 | % | |||||||||||||
Operating margin (1) | 1.7 | % | (0.6 | )% | (6.6 | )% | 230bp | 600bp | 383.3 | % | 90.9 | % | |||||||||||||
Footwear unit sales | 57,850 | 56,097 | 57,763 | 1,753 | (1,666 | ) | 3.1 | % | (2.9 | )% | |||||||||||||||
Average footwear selling price | $ | 17.31 | $ | 18.21 | $ | 18.53 | $ | (0.90 | ) | $ | (0.32 | ) | (4.9 | )% | (1.7 | )% | |||||||||
For the Year Ended December 31, | ||||||||||||||||||||||||
2017 | 2016 | 2015 | ||||||||||||||||||||||
Income Tax Jurisdiction | Net Income (Loss) Before Income Taxes | Income Tax Expense (Benefit) | Net Income (Loss) Before Income Taxes | Income Tax Expense (Benefit) | Net Income (Loss) Before Income Taxes | Income Tax Expense (Benefit) | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
United States | $ | (34,406 | ) | $ | 2,809 | $ | (55,617 | ) | $ | 437 | $ | (83,537 | ) | $ | (3,345 | ) | ||||||||
Netherlands | 25,859 | 2,813 | 39,184 | 4,711 | 25,988 | 4,262 | ||||||||||||||||||
Japan | 2,615 | 909 | (5,229 | ) | — | (69 | ) | 2,345 | ||||||||||||||||
Canada | 547 | 208 | 740 | 361 | (850 | ) | (391 | ) | ||||||||||||||||
China | 5,413 | (470 | ) | 821 | (473 | ) | (21,572 | ) | 4,433 | |||||||||||||||
Korea | 2,321 | 829 | 2,529 | 511 | 4,141 | 1,081 | ||||||||||||||||||
Other | 15,831 | 844 | 10,359 | 3,734 | 1,155 | 67 | ||||||||||||||||||
Total | $ | 18,180 | $ | 7,942 | $ | (7,213 | ) | $ | 9,281 | $ | (74,744 | ) | $ | 8,452 | ||||||||||
Effective tax rate | 43.7 | % | 128.7 | % | 11.3 | % | ||||||||||||||||||
• | 'U.S. tax on foreign earnings' includes the impact of the tax expense accrued on undistributed foreign earnings net of the related foreign tax credits. During 2017, the Tax Act significantly changed the U.S. taxation of foreign earnings. As a result, the impact of the transition tax as well as current year distributions, and reversal of the deferred tax liability associated with undistributed earnings and profits attributable to foreign subsidiaries, the Company is reflecting a $32.4 million tax benefit, which equates to a 178.4% favorable impact on the rate reconciliation. The total income tax provision impact of this benefit is offset by a corresponding change in the valuation allowance. |
• | ‘Enacted changes in tax law’ represents the estimated impact of the Tax Act of $17.6 million, equating to a 97.1% unfavorable impact. The Tax Act was enacted on December 22, 2017 and introduces significant changes to U.S. income tax law. Effective in 2018, the Tax Act reduces the U.S. statutory tax rate from 35% to 21% and creates new taxes on certain foreign-sourced earnings. Additionally, in 2017 we were subject to a one-time transition tax on accumulated foreign subsidiary earnings for which U.S. tax was not previously accrued. |
• | The change in 'Foreign differential' is principally driven by differences in pre-tax book income between the periods compared and the source of this income, which is subject to different jurisdictional tax rates. During 2017, the effect of rate differences resulted in an $11.8 million tax benefit, or 64.7% favorable rate impact, compared to a $12.6 million tax benefit, or 175% favorable rate impact, in 2016. The change was driven primarily by tax expense relative to profitable jurisdictions, partially offset by operating losses in certain jurisdictions where the Company has determined that it is not more likely than not to realize the associated tax benefits. Further, we employ a tax planning strategy that directly impacts the total tax expense directly attributable to the level of foreign earnings in the specific jurisdictions. However, we note that the impact on the effective tax rate is different due to book earnings recorded in 2017 compared to 2016. Through |
• | ‘Non-deductible/non-taxable items’ resulted in a $6.0 million tax expense in 2017, representing an unfavorable rate impact of 33.0%, compared to a $2.7 million tax expense in 2016, representing an unfavorable rate impact of 37.4%. The expense recognized in 2017 primarily relates to non-deductible executive and foreign share-based compensation, which we anticipate will recur in the foreseeable future, and the write-off of non-deductible goodwill, which we do not expect to recur in the foreseeable future. |
• | We continue to evaluate the realizability of our deferred tax assets. The impact of changes in valuation accounts to the effective tax rate was $24.4 million recorded on deferred tax assets that are not anticipated to be realized, equating to a 134.2% unfavorable impact. The specific circumstances regarding management's assertion of the realizability of certain deferred tax assets is discussed as part of the disclosures in Note 11 — Income Taxes. We maintain total valuation allowances of approximately $119.5 million as of December 31, 2017, which may be reduced in the future depending upon the achieved or sustained profitability of certain entities. |
• | During both 2017 and 2016, we recorded tax expense for audits settled during the year of $0.4 million and $0.3 million, respectively. The amount included in settlements during 2017 is netted against total uncertain tax position releases during the same period relating to the same positions. Furthermore, in Note 11 — Income Taxes the ‘Uncertain tax benefits’ line item in 2017 includes net accruals related to current year positions recorded, and is consistent with amounts accrued during prior years. We have released a significant portion of historical uncertain tax benefits based on effective and actual settlements. There is not currently an expectation that uncertain tax positions will significantly impact our tax expense on an ongoing basis. |
• | We incur state income tax losses during the period due to net operating losses recorded in the U.S., as well as applicable state modifications related to the taxability of foreign dividends. The tax provision benefit of these losses are offset by a valuation allowance. We are subject to certain minimal state income taxes. |
Year Ended December 31, | % Change | Constant Currency % Change (1) | |||||||||||||||||||||
2017 | 2016 | 2015 | 2017-2016 | 2016-2015 | 2017-2016 | 2016-2015 | |||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Wholesale: | |||||||||||||||||||||||
Americas | $ | 211,342 | $ | 202,211 | $ | 210,887 | 4.5 | % | (4.1 | )% | 3.8 | % | (2.6 | )% | |||||||||
Asia Pacific | 215,762 | 232,541 | 255,897 | (7.2 | )% | (9.1 | )% | (7.2 | )% | (10.3 | )% | ||||||||||||
Europe | 108,142 | 110,511 | 123,131 | (2.1 | )% | (10.2 | )% | (3.8 | )% | (9.3 | )% | ||||||||||||
Other businesses | 870 | 745 | 1,096 | 16.8 | % | (32.0 | )% | 13.4 | % | (32.1 | )% | ||||||||||||
Total wholesale | 536,116 | 546,008 | 591,011 | (1.8 | )% | (7.6 | )% | (2.4 | )% | (7.3 | )% | ||||||||||||
Retail: | |||||||||||||||||||||||
Americas | 188,367 | 191,855 | 197,306 | (1.8 | )% | (2.8 | )% | (1.9 | )% | (2.6 | )% | ||||||||||||
Asia Pacific | 108,868 | 125,037 | 136,320 | (12.9 | )% | (8.3 | )% | (12.7 | )% | (8.9 | )% | ||||||||||||
Europe | 40,998 | 42,712 | 44,873 | (4.0 | )% | (4.8 | )% | (8.4 | )% | (0.4 | )% | ||||||||||||
Total retail | 338,233 | 359,604 | 378,499 | (5.9 | )% | (5.0 | )% | (6.4 | )% | (4.6 | )% | ||||||||||||
E-commerce: | |||||||||||||||||||||||
Americas | 80,437 | 72,940 | 68,017 | 10.3 | % | 7.2 | % | 10.1 | % | 7.5 | % | ||||||||||||
Asia Pacific | 45,036 | 37,500 | 32,274 | 20.1 | % | 16.2 | % | 22.8 | % | 17.8 | % | ||||||||||||
Europe | 23,691 | 20,221 | 20,829 | 17.2 | % | (2.9 | )% | 14.0 | % | (2.8 | )% | ||||||||||||
Total e-commerce | 149,164 | 130,661 | 121,120 | 14.2 | % | 7.9 | % | 14.4 | % | 8.5 | % | ||||||||||||
Total revenues | $ | 1,023,513 | $ | 1,036,273 | $ | 1,090,630 | (1.2 | )% | (5.0 | )% | (1.7 | )% | (4.7 | )% | |||||||||
Year Ended December 31, | % Change | Constant Currency % Change (1) | |||||||||||||||||||||
2017 | 2016 | 2015 | 2017-2016 | 2016-2015 | 2017-2016 | 2016-2015 | |||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Americas | $ | 480,146 | $ | 467,006 | $ | 476,210 | 2.8 | % | (1.9 | )% | 2.5 | % | (0.7 | )% | |||||||||
Asia Pacific (2) | 369,667 | 395,078 | 424,491 | (6.4 | )% | (6.9 | )% | (6.1 | )% | 0.8 | % | ||||||||||||
Europe | 172,830 | 173,444 | 188,833 | (0.4 | )% | (8.1 | )% | (2.9 | )% | (1.7 | )% | ||||||||||||
Segment revenues | 1,022,643 | 1,035,528 | 1,089,534 | (1.2 | )% | (5.0 | )% | (1.7 | )% | (0.3 | )% | ||||||||||||
Other businesses | 870 | 745 | 1,096 | 16.8 | % | (32.0 | )% | 13.4 | % | 0.1 | % | ||||||||||||
Total consolidated revenues | $ | 1,023,513 | $ | 1,036,273 | $ | 1,090,630 | (1.2 | )% | (5.0 | )% | (1.7 | )% | (0.3 | )% | |||||||||
Income from operations: | |||||||||||||||||||||||
Americas | $ | 86,880 | $ | 58,844 | $ | 49,422 | 47.6 | % | 19.1 | % | 48.0 | % | (2.8 | )% | |||||||||
Asia Pacific | 79,273 | 78,907 | 48,447 | 0.5 | % | 62.9 | % | 0.5 | % | 2.8 | % | ||||||||||||
Europe | 25,736 | 17,757 | 15,629 | 44.9 | % | 13.6 | % | 42.2 | % | (1.6 | )% | ||||||||||||
Segment income from operations | 191,889 | 155,508 | 113,498 | 23.4 | % | 37.0 | % | 23.2 | % | (0.2 | )% | ||||||||||||
Reconciliation of segment income from operations to income (loss) before income taxes: | |||||||||||||||||||||||
Other businesses | (22,861 | ) | (26,935 | ) | (30,092 | ) | (15.1 | )% | (10.5 | )% | |||||||||||||
Unallocated corporate | (151,692 | ) | (134,727 | ) | (155,730 | ) | 12.6 | % | (13.5 | )% | |||||||||||||
Total consolidated income (loss) from operations | 17,336 | (6,154 | ) | (72,324 | ) | (381.7 | )% | (91.5 | )% | ||||||||||||||
Foreign currency transaction gain (loss), net | 563 | (2,454 | ) | (3,332 | ) | (122.9 | )% | (26.4 | )% | ||||||||||||||
Interest income | 870 | 692 | 967 | 25.7 | % | (28.4 | )% | ||||||||||||||||
Interest expense | (869 | ) | (836 | ) | (969 | ) | 3.9 | % | (13.7 | )% | |||||||||||||
Other income | 280 | 1,539 | 914 | (81.8 | )% | 68.4 | % | ||||||||||||||||
Income (loss) before income taxes | $ | 18,180 | $ | (7,213 | ) | $ | (74,744 | ) | (352.0 | )% | (90.3 | )% | |||||||||||
December 31, 2015 | Opened | Closed/Transferred | December 31, 2016 | Opened | Closed/Transferred | December 31, 2017 | ||||||||||||||
Type: | ||||||||||||||||||||
Kiosk/store-in- store | 98 | 14 | 14 | 98 | — | 27 | 71 | |||||||||||||
Retail stores | 275 | 19 | 66 | 228 | 6 | 73 | 161 | |||||||||||||
Outlet stores | 186 | 50 | 4 | 232 | 13 | 30 | 215 | |||||||||||||
Total | 559 | 83 | 84 | 558 | 19 | 130 | 447 | |||||||||||||
Operating segment: | ||||||||||||||||||||
Americas | 196 | 7 | 13 | 190 | 2 | 17 | 175 | |||||||||||||
Asia Pacific | 261 | 67 | 58 | 270 | 15 | 99 | 186 | |||||||||||||
Europe | 102 | 9 | 13 | 98 | 2 | 14 | 86 | |||||||||||||
Total | 559 | 83 | 84 | 558 | 19 | 130 | 447 | |||||||||||||
Constant Currency (1) | ||||||||
Year Ended December 31, | ||||||||
2017 | 2016 | 2015 | ||||||
Comparable retail store sales (2) | ||||||||
Americas | 1.3 | % | (2.3 | )% | (3.2 | )% | ||
Asia Pacific | (1.9 | )% | (5.9 | )% | (4.5 | )% | ||
Europe | (1.6 | )% | 1.9 | % | 3.0 | % | ||
Global | — | % | (3.0 | )% | (2.8 | )% | ||
Constant Currency (1) | |||||||||
Year Ended December 31, | |||||||||
2017 | 2,016 | 2016 | 2015 | ||||||
Direct to consumer comparable store sales (includes retail and e-commerce) (2) | |||||||||
Americas | 3.9 | % | 0.3 | % | 3.3 | % | |||
Asia Pacific | 6.4 | % | (0.4 | )% | 3.0 | % | |||
Europe | 4.1 | % | 0.2 | % | 7.8 | % | |||
Global | 4.7 | % | 0.1 | % | 3.9 | % | |||
Year Ended December 31, | 2017 vs. 2016 | ||||||||||
2017 | 2016 | ||||||||||
(in thousands) | |||||||||||
Cash provided by operating activities | $ | 98,264 | $ | 39,754 | $ | 58,510 | |||||
Cash used in investing activities | (10,972 | ) | (18,657 | ) | 7,685 | ||||||
Cash used in financing activities | (65,370 | ) | (16,443 | ) | (48,927 | ) | |||||
Effect of exchange rate changes on cash | 2,641 | (430 | ) | 3,071 | |||||||
Net increase in cash and cash equivalents | $ | 24,563 | $ | 4,224 | $ | 20,339 | |||||
Total | Less than 1 Year | 1 - 3 Years | 3 - 5 Years | More than 5 Years | |||||||||||||||
(in thousands) | |||||||||||||||||||
Operating lease obligations (1) | $ | 210,511 | $ | 53,329 | $ | 65,363 | $ | 39,493 | $ | 52,326 | |||||||||
Inventory purchase obligations with third-party manufacturers (2) | 122,699 | 122,699 | — | — | — | ||||||||||||||
Dividends payable (3) | 48,866 | 12,000 | 24,000 | 12,866 | — | ||||||||||||||
Other contracts (4) | 35,580 | 24,011 | 8,349 | 3,220 | — | ||||||||||||||
Minimum licensing royalties (5) | 3,010 | 2,954 | 56 | — | — | ||||||||||||||
Debt obligations (6) | 662 | 662 | — | — | — | ||||||||||||||
Capital lease obligations (7) | 44 | 14 | 24 | 6 | — | ||||||||||||||
Total | $ | 421,372 | $ | 215,669 | $ | 97,792 | $ | 55,585 | $ | 52,326 | |||||||||
Plan Category | Number of Securities to be Issued on Exercise of Outstanding Options and Rights (2) | Weighted Average Exercise Price of Outstanding Options (3) | Number of Securities Remaining Available for Future Issuance Under Plans, Excluding Securities Available in First Column | ||||||
Equity compensation plans approved by stockholders (1) | 3,682,751 | $ | 11.00 | 3,511,206 | |||||
Equity compensation plans not approved by stockholders | — | — | — | ||||||
Total | 3,682,751 | $ | 11.00 | 3,511,206 | |||||
• | Schedule II - Valuation and Qualifying Accounts. |
Exhibit Number | Description | |
3.1 | ||
3.2 | ||
3.3 | ||
3.4 | ||
4.1 | ||
10.1 | * | |
10.2 | * | |
10.3 | * | |
10.4 | * | |
10.5 | * | |
10.6 | * | |
10.7 | * | |
10.8 | * | |
10.9 | ||
10.10 | ||
10.11 | ||
Exhibit Number | Description | |
10.12 | ||
10.13 | ||
10.14 | ||
10.15 | ||
10.16 | ||
10.17 | ||
10.18 | ||
10.19 | ||
10.20 | ||
10.21 | ||
10.22 | ||
10.23 | † | |
Exhibit Number | Description | |
10.24 | † | |
10.25 | * | |
10.26 | ||
10.27 | ||
10.28 | ||
10.29 | ||
10.30 | * | |
10.31 | * | |
10.32 | * | |
10.33 | * | |
10.34 | * | |
10.35 | * | |
21 | † | |
23.1 | † | |
31.1 | † | |
31.2 | † | |
32 | † | |
101.INS | † | XBRL Instance Document |
Exhibit Number | Description | |
101.SCH | † | XBRL Taxonomy Extension Schema Document |
101.CAL | † | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | † | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB | † | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | † | XBRL Taxonomy Extension Presentation Linkbase Document |
CROCS, INC. a Delaware Corporation | |||
By: | /s/ ANDREW REES | ||
Name: | Andrew Rees | ||
Title: | President and Chief Executive Officer | ||
Signature | Title | Date | ||
/s/ ANDREW REES | President, Chief Executive Officer, and Director (Principal Executive Officer) | February 28, 2018 | ||
Andrew Rees | ||||
/s/ CARRIE W. TEFFNER | Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) | February 28, 2018 | ||
Carrie W. Teffner | ||||
/s/ THOMAS J. SMACH | Chairman of the Board | February 28, 2018 | ||
Thomas J. Smach | ||||
/s/ IAN M. BICKLEY | Director | February 28, 2018 | ||
Ian M. Bickley | ||||
/s/ RONALD L. FRASCH | Director | February 28, 2018 | ||
Ronald L. Frasch | ||||
/s/ PRAKASH A. MELWANI | Director | February 28, 2018 | ||
Prakash A. Melwani | ||||
/s/ GREGG S. RIBATT | Director | February 28, 2018 | ||
Gregg S. Ribatt | ||||
/s/ DOUGLAS J. TREFF | Director | February 28, 2018 | ||
Douglas J. Treff | ||||
/s/ DOREEN A. WRIGHT | Director | February 28, 2018 | ||
Doreen A. Wright | ||||
Financial Statements: | |
Report of Independent Registered Public Accounting Firm | |
Consolidated Statements of Operations for the Years Ended December 31, 2017, 2016, and 2015 | |
Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2017, 2016, and 2015 | |
Consolidated Balance Sheets as of December 31, 2017 and 2016 | |
Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2017, 2016, and 2015 | |
Consolidated Statements of Cash Flows for the Years Ended December 31, 2017, 2016, and 2015 | |
Notes to Consolidated Financial Statements | |
Schedule II: Valuation and Qualifying Accounts | |
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Revenues | $ | 1,023,513 | $ | 1,036,273 | $ | 1,090,630 | |||||
Cost of sales | 506,292 | 536,109 | 579,825 | ||||||||
Gross profit | 517,221 | 500,164 | 510,805 | ||||||||
Selling, general and administrative expenses | 494,601 | 503,174 | 567,823 | ||||||||
Asset impairments | 5,284 | 3,144 | 15,306 | ||||||||
Income (loss) from operations | 17,336 | (6,154 | ) | (72,324 | ) | ||||||
Foreign currency gain (loss), net | 563 | (2,454 | ) | (3,332 | ) | ||||||
Interest income | 870 | 692 | 967 | ||||||||
Interest expense | (869 | ) | (836 | ) | (969 | ) | |||||
Other income, net | 280 | 1,539 | 914 | ||||||||
Income (loss) before income taxes | 18,180 | (7,213 | ) | (74,744 | ) | ||||||
Income tax expense | 7,942 | 9,281 | 8,452 | ||||||||
Net income (loss) | 10,238 | (16,494 | ) | (83,196 | ) | ||||||
Dividends on Series A convertible preferred stock | (12,000 | ) | (12,000 | ) | (11,833 | ) | |||||
Dividend equivalents on Series A convertible preferred shares related to redemption value accretion and beneficial conversion feature | (3,532 | ) | (3,244 | ) | (2,978 | ) | |||||
Net loss attributable to common stockholders | $ | (5,294 | ) | $ | (31,738 | ) | $ | (98,007 | ) | ||
Net loss per common share: | |||||||||||
Basic | $ | (0.07 | ) | $ | (0.43 | ) | $ | (1.30 | ) | ||
Diluted | $ | (0.07 | ) | $ | (0.43 | ) | $ | (1.30 | ) | ||
Weighted average common shares outstanding: | |||||||||||
Basic | 72,255 | 73,371 | 75,604 | ||||||||
Diluted | 72,255 | 73,371 | 75,604 | ||||||||
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Net income (loss) | $ | 10,238 | $ | (16,494 | ) | $ | (83,196 | ) | |||
Other comprehensive income (loss): | |||||||||||
Foreign currency gain (loss), net | 12,202 | (4,683 | ) | (32,561 | ) | ||||||
Total comprehensive income (loss) | $ | 22,440 | $ | (21,177 | ) | $ | (115,757 | ) | |||
December 31, | |||||||
2017 | 2016 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 172,128 | $ | 147,565 | |||
Accounts receivable, net of allowances of $31,389 and $48,138, respectively | 83,518 | 78,297 | |||||
Inventories | 130,347 | 147,029 | |||||
Income taxes receivable | 3,652 | 2,995 | |||||
Other receivables | 10,664 | 14,642 | |||||
Restricted cash - current | 2,144 | 2,534 | |||||
Prepaid expenses and other assets | 22,596 | 32,413 | |||||
Total current assets | 425,049 | 425,475 | |||||
Property and equipment, net of accumulated depreciation and amortization of $91,806 and $88,603, respectively | 35,032 | 44,090 | |||||
Intangible assets, net | 56,427 | 72,700 | |||||
Goodwill | 1,688 | 1,480 | |||||
Deferred tax assets, net | 10,174 | 6,825 | |||||
Restricted cash | 2,783 | 2,547 | |||||
Other assets | 12,542 | 13,273 | |||||
Total assets | $ | 543,695 | $ | 566,390 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 66,381 | $ | 61,927 | |||
Accrued expenses and other liabilities | 84,446 | 78,282 | |||||
Income taxes payable | 5,515 | 6,593 | |||||
Current portion of borrowings and capital lease obligations | 676 | 2,338 | |||||
Total current liabilities | 157,018 | 149,140 | |||||
Long-term income taxes payable | 6,081 | 4,464 | |||||
Other liabilities | 12,298 | 13,502 | |||||
Total liabilities | 175,397 | 167,106 | |||||
Commitments and contingencies: | |||||||
Series A convertible preferred stock, 0.2 million shares outstanding, liquidation preference $203 million | 182,433 | 178,901 | |||||
Stockholders’ equity: | |||||||
Preferred stock, par value $0.001 per share, none outstanding | — | — | |||||
Common stock, par value $0.001 per share, 94.8 million and 93.9 million issued, 68.8 million and 73.6 million shares outstanding, respectively | 95 | 94 | |||||
Treasury stock, at cost, 26.0 million and 20.3 million shares, respectively | (334,312 | ) | (284,237 | ) | |||
Additional paid-in capital | 373,045 | 364,397 | |||||
Retained earnings | 190,431 | 195,725 | |||||
Accumulated other comprehensive loss | (43,394 | ) | (55,596 | ) | |||
Total stockholders’ equity | 185,865 | 220,383 | |||||
Total liabilities and stockholders’ equity | $ | 543,695 | $ | 566,390 | |||
Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Stock-holders' Equity | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||
Balance at December 31, 2014 | 78,516 | $ | 92 | 13,809 | $ | (200,424 | ) | $ | 345,732 | $ | 325,470 | $ | (18,352 | ) | $ | 452,518 | |||||||||||||
Share-based compensation | — | — | — | — | 11,186 | — | — | 11,186 | |||||||||||||||||||||
Tax shortfall from share-based plans | — | — | — | — | (2,841 | ) | — | — | (2,841 | ) | |||||||||||||||||||
Exercises of stock options and issuance of restricted stock awards | 810 | 2 | (34 | ) | 2,437 | (836 | ) | — | — | 1,603 | |||||||||||||||||||
Repurchases of common stock | (6,475 | ) | — | 6,475 | (85,926 | ) | — | — | — | (85,926 | ) | ||||||||||||||||||
Series A preferred dividends | — | — | — | — | — | (11,833 | ) | — | (11,833 | ) | |||||||||||||||||||
Series A preferred accretion | — | — | — | — | — | (2,978 | ) | — | (2,978 | ) | |||||||||||||||||||
Net loss | — | — | — | — | — | (83,196 | ) | — | (83,196 | ) | |||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | — | (32,561 | ) | (32,561 | ) | |||||||||||||||||||
Balance at December 31, 2015 | 72,851 | $ | 94 | 20,250 | $ | (283,913 | ) | $ | 353,241 | $ | 227,463 | $ | (50,913 | ) | $ | 245,972 | |||||||||||||
Share-based compensation | — | — | — | — | 10,736 | — | — | 10,736 | |||||||||||||||||||||
Exercises of stock options and issuance of restricted stock awards | 749 | — | 37 | (324 | ) | 420 | — | — | 96 | ||||||||||||||||||||
Series A preferred dividends | — | — | — | — | — | (12,000 | ) | — | (12,000 | ) | |||||||||||||||||||
Series A preferred accretion | — | — | — | — | — | (3,244 | ) | — | (3,244 | ) | |||||||||||||||||||
Net loss | — | — | — | — | — | (16,494 | ) | — | (16,494 | ) | |||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | — | (4,683 | ) | (4,683 | ) | |||||||||||||||||||
Balance at December 31, 2016 | 73,600 | $ | 94 | 20,287 | $ | (284,237 | ) | $ | 364,397 | $ | 195,725 | $ | (55,596 | ) | $ | 220,383 | |||||||||||||
Share-based compensation | — | — | — | — | 11,619 | — | — | 11,619 | |||||||||||||||||||||
Exercises of stock options and issuance of restricted stock awards | 850 | 1 | 41 | (75 | ) | (2,971 | ) | — | — | (3,045 | ) | ||||||||||||||||||
Repurchases of common stock | (5,659 | ) | — | 5,659 | (50,000 | ) | — | — | — | (50,000 | ) | ||||||||||||||||||
Series A preferred dividends | — | — | — | — | — | (12,000 | ) | — | (12,000 | ) | |||||||||||||||||||
Series A preferred accretion | — | — | — | — | — | (3,532 | ) | — | (3,532 | ) | |||||||||||||||||||
Net income | — | — | — | — | — | 10,238 | — | 10,238 | |||||||||||||||||||||
Other comprehensive gain | — | — | — | — | — | — | 12,202 | 12,202 | |||||||||||||||||||||
Balance at December 31, 2017 | 68,791 | $ | 95 | 25,987 | $ | (334,312 | ) | $ | 373,045 | $ | 190,431 | $ | (43,394 | ) | $ | 185,865 | |||||||||||||
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | $ | 10,238 | $ | (16,494 | ) | $ | (83,196 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 33,130 | 34,043 | 35,993 | ||||||||
Unrealized foreign currency (gain) loss, net | 1,025 | (9,027 | ) | (814 | ) | ||||||
Share-based compensation | 9,773 | 10,736 | 11,236 | ||||||||
Asset impairments | 5,284 | 3,144 | 15,306 | ||||||||
(Recovery) provision for doubtful accounts, net | (589 | ) | 3,230 | 25,997 | |||||||
Deferred taxes | (3,093 | ) | (388 | ) | 289 | ||||||
Other non-cash items | (2,406 | ) | 503 | 7,137 | |||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable, net of allowances | 620 | 2,408 | (15,604 | ) | |||||||
Inventories | 23,319 | 20,371 | (8,586 | ) | |||||||
Prepaid expenses and other assets | 18,907 | (4,532 | ) | 1,755 | |||||||
Accounts payable | (2,714 | ) | (1,354 | ) | 23,260 | ||||||
Accrued expenses and other liabilities | 5,489 | 2,884 | 5,088 | ||||||||
Income taxes | (719 | ) | (5,770 | ) | (8,163 | ) | |||||
Cash provided by operating activities | 98,264 | 39,754 | 9,698 | ||||||||
Cash flows from investing activities: | |||||||||||
Purchases of property, equipment, and software | (13,117 | ) | (22,194 | ) | (18,486 | ) | |||||
Proceeds from disposal of property and equipment | 1,579 | 2,438 | (2 | ) | |||||||
Change in restricted cash | 566 | 1,199 | (139 | ) | |||||||
Other | — | (100 | ) | — | |||||||
Cash used in investing activities | (10,972 | ) | (18,657 | ) | (18,627 | ) | |||||
Cash flows from financing activities: | |||||||||||
Proceeds from bank borrowings | 5,500 | 31,582 | — | ||||||||
Repayments of bank borrowings and capital lease obligations | (8,611 | ) | (35,640 | ) | (5,290 | ) | |||||
Dividends—Series A preferred stock | (12,000 | ) | (12,000 | ) | (11,900 | ) | |||||
Repurchases of common stock | (50,000 | ) | — | (85,926 | ) | ||||||
Other | (259 | ) | (385 | ) | 1,856 | ||||||
Cash used in financing activities | (65,370 | ) | (16,443 | ) | (101,260 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents | 2,641 | (430 | ) | (13,982 | ) | ||||||
Net change in cash and cash equivalents | 24,563 | 4,224 | (124,171 | ) | |||||||
Cash and cash equivalents—beginning of year | 147,565 | 143,341 | 267,512 | ||||||||
Cash and cash equivalents—end of year | $ | 172,128 | $ | 147,565 | $ | 143,341 | |||||
Cash paid for interest | $ | 434 | $ | 653 | $ | 917 | |||||
Cash paid for income taxes | 13,208 | 12,344 | 19,923 | ||||||||
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(in thousands) | |||||||||||
Accrued purchases of property, equipment, and software | $ | 2,195 | $ | 2,728 | $ | 851 | |||||
Accretion of dividend equivalents | 3,532 | 3,244 | 2,978 | ||||||||
Vendor financed insurance premiums | 1,450 | 2,082 | — | ||||||||
Level | Inputs | ||||
1 | Unadjusted quoted prices in active markets for identical assets and liabilities. | ||||
2 | Unadjusted quoted prices in active markets for similar assets and liabilities; | ||||
Unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active; or | |||||
Inputs other than quoted prices that are observable for the asset or liability. | |||||
3 | Unobservable inputs for the asset or liability. | ||||
December 31, | |||||||
2017 | 2016 | ||||||
(in thousands) | |||||||
Machinery and equipment | $ | 33,109 | $ | 33,163 | |||
Leasehold improvements | 72,961 | 73,363 | |||||
Furniture, fixtures, and other | 19,776 | 19,358 | |||||
Construction-in-progress | 992 | 6,809 | |||||
Property and equipment | 126,838 | 132,693 | |||||
Less: Accumulated depreciation and amortization | (91,806 | ) | (88,603 | ) | |||
Property and equipment, net | $ | 35,032 | $ | 44,090 | |||
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(in thousands) | |||||||||||
Cost of sales | $ | 2,278 | $ | 1,755 | $ | 1,764 | |||||
Selling, general and administrative expenses | 12,723 | 13,312 | 14,533 | ||||||||
Total depreciation and amortization expense | $ | 15,001 | $ | 15,067 | $ | 16,297 | |||||
Year Ended December 31, | ||||||||||||||||||||
2017 | 2016 | 2015 | ||||||||||||||||||
Asset Impairment | Number of Stores | Asset Impairment | Number of Stores | Asset Impairment | Number of Stores | |||||||||||||||
(in thousands, except store count data) | ||||||||||||||||||||
Americas | $ | 455 | 3 | $ | 1,703 | 12 | $ | 7,237 | 27 | |||||||||||
Asia Pacific (1) | — | — | 672 | 21 | 6,450 | 36 | ||||||||||||||
Europe | 75 | 1 | 338 | 9 | 1,584 | 21 | ||||||||||||||
Total | $ | 530 | 4 | $ | 2,713 | 42 | $ | 15,271 | 84 | |||||||||||
Goodwill | |||
(in thousands) | |||
Balance at January 1, 2016 | $ | 1,973 | |
Foreign currency translation | (62 | ) | |
Impairment | (431 | ) | |
Balance at December 31, 2016 | 1,480 | ||
Foreign currency translation | 208 | ||
Balance at December 31, 2017 | $ | 1,688 | |
December 31, 2017 | December 31, 2016 | |||||||||||||||||||||||
Gross | Accum. Amortiz. | Net | Gross | Accum. Amortiz. | Net | |||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Intangible assets subject to amortization: | ||||||||||||||||||||||||
Capitalized software | $ | 143,275 | $ | (90,219 | ) | $ | 53,056 | $ | 142,358 | $ | (74,530 | ) | $ | 67,828 | ||||||||||
Patents, copyrights, and trademarks | 5,636 | (4,969 | ) | 667 | 6,438 | (5,471 | ) | 967 | ||||||||||||||||
Other | 214 | (214 | ) | — | 2,855 | (2,855 | ) | — | ||||||||||||||||
Intangible assets not subject to amortization: | ||||||||||||||||||||||||
In progress (1) | 2,378 | — | 2,378 | 3,616 | — | 3,616 | ||||||||||||||||||
Trademarks and other | 326 | — | 326 | 289 | — | 289 | ||||||||||||||||||
Total | $ | 151,829 | $ | (95,402 | ) | $ | 56,427 | $ | 155,556 | $ | (82,856 | ) | $ | 72,700 | ||||||||||
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(in thousands) | |||||||||||
Cost of sales | $ | 4,550 | $ | 5,127 | $ | 5,848 | |||||
Selling, general and administrative expenses | 13,579 | 13,849 | 13,848 | ||||||||
Total amortization expense | $ | 18,129 | $ | 18,976 | $ | 19,696 | |||||
As of December 31, 2017 | |||
(in thousands) | |||
2018 | $ | 16,231 | |
2019 | 14,009 | ||
2020 | 11,306 | ||
2021 | 11,052 | ||
2022 | 603 | ||
Thereafter | 522 | ||
Total | $ | 53,723 | |
December 31, | |||||||
2017 | 2016 | ||||||
(in thousands) | |||||||
Accrued compensation and benefits | $ | 34,955 | $ | 20,898 | |||
Professional services | 10,835 | 10,900 | |||||
Accrued rent and occupancy | 8,535 | 7,335 | |||||
Fulfillment, freight, and duties (1) | 6,921 | 14,572 | |||||
Royalties payable and deferred revenue | 6,193 | 7,475 | |||||
Sales/use and value added taxes payable | 3,509 | 4,978 | |||||
Other (2) | 13,498 | 12,124 | |||||
Total accrued expenses and other liabilities | $ | 84,446 | $ | 78,282 | |||
December 31, 2017 | December 31, 2016 | ||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
(in thousands) | |||||||||||||||
Borrowings and capital lease obligations | $ | 706 | $ | 706 | $ | 2,378 | $ | 2,378 | |||||||
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(in thousands) | |||||||||||
Discontinued project | $ | 4,754 | $ | — | $ | — | |||||
Retail store asset impairment | 530 | 2,713 | 15,306 | ||||||||
Goodwill impairment | — | 431 | — | ||||||||
December 31, 2017 | December 31, 2016 | ||||||||||||||
Derivative Assets | Derivative Liabilities | Derivative Assets | Derivative Liabilities | ||||||||||||
(in thousands) | |||||||||||||||
Forward foreign currency exchange contracts | $ | 1,241 | $ | (1,647 | ) | $ | 6,541 | $ | (6,698 | ) | |||||
Netting of counterparty contracts | (1,241 | ) | 1,241 | (6,541 | ) | 6,541 | |||||||||
Foreign currency forward contract derivatives | $ | — | $ | (406 | ) | $ | — | $ | (157 | ) | |||||
December 31, 2017 | December 31, 2016 | ||||||||||||||
Notional | Fair Value | Notional | Fair Value | ||||||||||||
(in thousands) | |||||||||||||||
Singapore Dollar | $ | 73,455 | $ | 364 | $ | 94,763 | $ | (2,611 | ) | ||||||
Euro | 37,718 | (122 | ) | 71,228 | (1,441 | ) | |||||||||
Japanese Yen | 30,688 | (89 | ) | 87,171 | 4,180 | ||||||||||
South Korean Won | 15,888 | (134 | ) | 8,278 | 407 | ||||||||||
British Pound Sterling | 13,233 | 80 | 14,332 | (660 | ) | ||||||||||
Other currencies | 53,698 | (505 | ) | 52,449 | (32 | ) | |||||||||
Total | $ | 224,680 | $ | (406 | ) | $ | 328,221 | $ | (157 | ) | |||||
Latest maturity date | January 2018 | January 2017 | |||||||||||||
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(in thousands) | |||||||||||
Foreign currency transaction gains | $ | 2,284 | $ | 10,814 | $ | 3,980 | |||||
Foreign currency forward exchange contracts losses | (1,721 | ) | (13,268 | ) | (7,312 | ) | |||||
Foreign currency gain (loss), net | $ | 563 | $ | (2,454 | ) | $ | (3,332 | ) | |||
December 31, | |||||||
2017 | 2016 | ||||||
(in thousands) | |||||||
Notes payable | $ | 662 | $ | 2,329 | |||
Capital lease obligations | 44 | 49 | |||||
Total borrowings and capital lease obligations | 706 | 2,378 | |||||
Less: Current portion of borrowings and capital lease obligations | 676 | 2,338 | |||||
Total long-term capital lease obligations | $ | 30 | $ | 40 | |||
As of December 31, 2017 | |||
(in thousands) | |||
2018 | $ | 676 | |
2019 | 13 | ||
2020 | 11 | ||
2021 | 6 | ||
Total principal debt maturities and capital lease obligations | 706 | ||
Less: current portion | 676 | ||
Non-current portion | $ | 30 | |
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(in thousands) | |||||||||||
Cost of sales | $ | 379 | $ | 488 | $ | 539 | |||||
Selling, general and administrative expenses | 9,394 | 10,199 | 10,697 | ||||||||
Total share-based compensation expense | $ | 9,773 | $ | 10,687 | $ | 11,236 | |||||
Shares | Weighted Average Exercise Price | Weighted Average Contractual Life (Years) | Aggregate Intrinsic Value | |||||||||
(in thousands, except exercise price and years) | ||||||||||||
Outstanding as of December 31, 2016 | 518 | $ | 16.90 | 3.99 | $ | 186 | ||||||
Granted | 200 | 6.98 | ||||||||||
Exercised | (16 | ) | 6.00 | |||||||||
Forfeited or expired | (161 | ) | 25.52 | |||||||||
Outstanding as of December 31, 2017 | 541 | $ | 11.00 | 5.37 | $ | 1,918 | ||||||
Exercisable at December 31, 2017 | 320 | $ | 13.28 | 2.78 | $ | 786 | ||||||
Vested and expected to vest at December 31, 2017 | 541 | $ | 11.00 | 5.37 | $ | 1,918 | ||||||
Year Ended December 31, | |||
2017 | 2015 | ||
Expected volatility | 40.7% | 42.5% | |
Dividend yield | — | — | |
Risk-free interest rate | 1.76% | 1.50% - 1.72% | |
Expected life (in years) | 4.00 | 4.00 | |
Restricted Stock Awards | Restricted Stock Units | ||||||||||||
Shares | Weighted Average Grant Date Fair Value | Shares | Weighted Average Grant Date Fair Value | ||||||||||
(in thousands, except fair value data) | |||||||||||||
Unvested at December 31, 2016 | 11 | $ | 10.28 | 3,855 | $ | 10.31 | |||||||
Granted | 35 | 6.84 | 2,434 | 6.84 | |||||||||
Vested | (29 | ) | 8.19 | (764 | ) | 10.88 | |||||||
Forfeited | — | N/A | (1,734 | ) | 9.60 | ||||||||
Unvested at December 31, 2017 | 17 | $ | 6.84 | 3,791 | $ | 7.99 | |||||||
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(in thousands) | |||||||||||
Income (loss) before taxes: | |||||||||||
U.S. | $ | (34,406 | ) | $ | (55,617 | ) | $ | (83,537 | ) | ||
Foreign | 52,586 | 48,404 | 8,793 | ||||||||
Total income (loss) before taxes | $ | 18,180 | $ | (7,213 | ) | $ | (74,744 | ) | |||
Income tax expense: | |||||||||||
Current income taxes: | |||||||||||
U.S. federal | $ | 1,383 | $ | 49 | $ | 480 | |||||
U.S. state | 127 | 126 | 195 | ||||||||
Foreign | 9,525 | 9,494 | 7,488 | ||||||||
Total current income taxes | 11,035 | 9,669 | 8,163 | ||||||||
Deferred income taxes: | |||||||||||
U.S. federal | 1,300 | 263 | (3,902 | ) | |||||||
U.S. state | — | — | (118 | ) | |||||||
Foreign | (4,393 | ) | (651 | ) | 4,309 | ||||||
Total deferred income taxes | (3,093 | ) | (388 | ) | 289 | ||||||
Total income tax expense | $ | 7,942 | $ | 9,281 | $ | 8,452 | |||||
Year Ended December 31, | ||||||||||||||||||||
2017 | 2016 | 2015 | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Income tax expense and rate attributable to: | ||||||||||||||||||||
Federal | $ | 6,363 | 35.0 | % | $ | (2,524 | ) | (35.0 | )% | $ | (26,160 | ) | (35.0 | )% | ||||||
State, net of federal benefit | 53 | 0.3 | (202 | ) | (2.8 | ) | (543 | ) | (0.7 | ) | ||||||||||
Foreign differential | (11,768 | ) | (64.7 | ) | (12,624 | ) | (175.0 | ) | (3,678 | ) | (4.9 | ) | ||||||||
Enacted changes in tax law | 17,645 | 97.1 | — | — | — | — | ||||||||||||||
Non-deductible / non-taxable items | 6,006 | 33.0 | 2,694 | 37.4 | (2,181 | ) | (2.9 | ) | ||||||||||||
Change in valuation allowance | 24,400 | 134.2 | 16,041 | 222.4 | 10,892 | 14.5 | ||||||||||||||
U.S. tax on foreign earnings | (32,427 | ) | (178.4 | ) | 23,130 | 320.6 | 82,311 | 110.0 | ||||||||||||
Foreign tax credits | (7,980 | ) | (43.9 | ) | (18,581 | ) | (257.6 | ) | (49,432 | ) | (66.1 | ) | ||||||||
Uncertain tax positions | 1,054 | 5.8 | 19 | 0.3 | (3,952 | ) | (5.3 | ) | ||||||||||||
Audit settlements | 354 | 1.9 | 253 | 3.5 | 1,167 | 1.6 | ||||||||||||||
Stock compensation windfall / shortfall | 882 | 4.9 | 2,120 | 29.4 | — | — | ||||||||||||||
Deferred income tax account adjustments | 2,679 | 14.7 | (842 | ) | (11.7 | ) | — | — | ||||||||||||
Other | 681 | 3.8 | (203 | ) | (2.8 | ) | 28 | 0.1 | ||||||||||||
Effective income tax expense and rate | $ | 7,942 | 43.7 | % | $ | 9,281 | 128.7 | % | $ | 8,452 | 11.3 | % | ||||||||
December 31, | |||||||
2017 | 2016 | ||||||
(in thousands) | |||||||
Non-current deferred tax assets: | |||||||
Stock compensation expense | $ | 2,940 | $ | 4,597 | |||
Long-term accrued expenses | 20,728 | 26,127 | |||||
Net operating loss | 42,956 | 36,424 | |||||
Intangible assets | 1,620 | 3,654 | |||||
Future uncertain tax position offset | 498 | 396 | |||||
Unrealized loss on foreign currency | 119 | — | |||||
Foreign tax credit | 67,655 | 69,586 | |||||
Other | 2,792 | 5,481 | |||||
Valuation allowance | (119,494 | ) | (90,900 | ) | |||
Total non-current deferred tax assets | $ | 19,814 | $ | 55,365 | |||
Non-current deferred tax liabilities: | |||||||
Intangible assets | $ | — | $ | (41 | ) | ||
Unremitted earnings of foreign subsidiary | — | (32,427 | ) | ||||
Property and equipment | (9,640 | ) | (16,072 | ) | |||
Total non-current deferred tax liabilities | $ | (9,640 | ) | $ | (48,540 | ) | |
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(in thousands) | |||||||||||
Unrecognized tax benefit as of January 1 | $ | 4,750 | $ | 4,957 | $ | 8,444 | |||||
Gross increases in tax positions in prior period | 1,025 | 646 | 643 | ||||||||
Gross decreases in tax positions in prior period | — | (664 | ) | (385 | ) | ||||||
Gross increases in tax positions in current period | 966 | 245 | 549 | ||||||||
Settlements | (123 | ) | (238 | ) | (4,126 | ) | |||||
Lapse of statute of limitations | (414 | ) | (196 | ) | (168 | ) | |||||
Unrecognized tax benefit as of December 31 | $ | 6,204 | $ | 4,750 | $ | 4,957 | |||||
Netherlands | 2005 to 2017 |
Canada | 2010 to 2017 |
Japan | 2011 to 2017 |
China | 2011 to 2017 |
Singapore | 2014 to 2017 |
United States | 2010 to 2017 |
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(in thousands, except per share data) | |||||||||||
Numerator: | |||||||||||
Net loss attributable to common stockholders - basic and diluted | $ | (5,294 | ) | $ | (31,738 | ) | $ | (98,007 | ) | ||
Denominator: | |||||||||||
Weighted average common shares outstanding - basic and diluted | 72,255 | 73,371 | 75,604 | ||||||||
Net loss per common share: | |||||||||||
Basic | $ | (0.07 | ) | $ | (0.43 | ) | $ | (1.30 | ) | ||
Diluted | $ | (0.07 | ) | $ | (0.43 | ) | $ | (1.30 | ) | ||
December 31, 2017 | |||
(in thousands) | |||
2018 | $ | 53,329 | |
2019 | 36,816 | ||
2020 | 28,547 | ||
2021 | 22,843 | ||
2022 | 16,650 | ||
Thereafter | 52,326 | ||
Total minimum lease payments | $ | 210,511 | |
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(in thousands) | |||||||||||
Minimum rentals (1) | $ | 78,961 | $ | 88,182 | $ | 96,579 | |||||
Contingent rentals | 14,294 | 14,596 | 14,929 | ||||||||
Less: Sublease rentals | (182 | ) | (187 | ) | (322 | ) | |||||
Total rent expense | $ | 93,073 | $ | 102,591 | $ | 111,186 | |||||
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(in thousands) | |||||||||||
Revenues: | |||||||||||
Americas | $ | 480,146 | $ | 467,006 | $ | 476,210 | |||||
Asia Pacific | 369,667 | 395,078 | 424,491 | ||||||||
Europe | 172,830 | 173,444 | 188,833 | ||||||||
Segment revenues | 1,022,643 | 1,035,528 | 1,089,534 | ||||||||
Other businesses | 870 | 745 | 1,096 | ||||||||
Total consolidated revenues | $ | 1,023,513 | $ | 1,036,273 | $ | 1,090,630 | |||||
Income from operations: | |||||||||||
Americas (1) | $ | 86,880 | $ | 58,844 | $ | 49,422 | |||||
Asia Pacific (2) | 79,273 | 78,907 | 48,447 | ||||||||
Europe (3) | 25,736 | 17,757 | 15,629 | ||||||||
Segment income from operations | 191,889 | 155,508 | 113,498 | ||||||||
Reconciliation of segment income from operations to income (loss) before income taxes: | |||||||||||
Other businesses | (22,861 | ) | (26,935 | ) | (30,092 | ) | |||||
Unallocated corporate (4) | (151,692 | ) | (134,727 | ) | (155,730 | ) | |||||
Total consolidated income (loss) from operations | 17,336 | (6,154 | ) | (72,324 | ) | ||||||
Foreign currency gain (loss), net | 563 | (2,454 | ) | (3,332 | ) | ||||||
Interest income | 870 | 692 | 967 | ||||||||
Interest expense | (869 | ) | (836 | ) | (969 | ) | |||||
Other income | 280 | 1,539 | 914 | ||||||||
Income (loss) before income taxes | $ | 18,180 | $ | (7,213 | ) | $ | (74,744 | ) | |||
Depreciation and amortization: | |||||||||||
Americas | $ | 5,473 | $ | 5,787 | $ | 7,401 | |||||
Asia Pacific | 3,464 | 4,264 | 3,913 | ||||||||
Europe | 1,878 | 2,133 | 2,229 | ||||||||
Total segment depreciation and amortization | 10,815 | 12,184 | 13,543 | ||||||||
Other businesses | 6,748 | 6,830 | 7,634 | ||||||||
Unallocated corporate | 15,567 | 15,029 | 14,816 | ||||||||
Total consolidated depreciation and amortization | $ | 33,130 | $ | 34,043 | $ | 35,993 | |||||
December 31, | |||||||
2017 | 2016 | ||||||
(in thousands) | |||||||
Long-lived assets: | |||||||
Americas | $ | 17,129 | $ | 22,406 | |||
Asia Pacific | 4,171 | 6,524 | |||||
Europe | 4,609 | 5,091 | |||||
Total segment long-lived assets | 25,909 | 34,021 | |||||
Supply Chain | 17,396 | 21,872 | |||||
Corporate and other | 49,842 | 62,377 | |||||
Total long-lived assets | $ | 93,147 | $ | 118,270 | |||
Total consolidated assets: | |||||||
Americas | $ | 158,641 | $ | 181,404 | |||
Asia Pacific | 161,646 | 154,862 | |||||
Europe | 76,537 | 87,894 | |||||
Total segment assets | 396,824 | 424,160 | |||||
Supply Chain | 37,793 | 43,039 | |||||
Corporate and other | 109,078 | 99,191 | |||||
Total consolidated assets | $ | 543,695 | $ | 566,390 | |||
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(in thousands) | |||||||||||
Location: | |||||||||||
United States | $ | 388,847 | $ | 384,939 | $ | 392,463 | |||||
International (1) | 634,666 | 651,334 | 698,167 | ||||||||
Total revenues | $ | 1,023,513 | $ | 1,036,273 | $ | 1,090,630 | |||||
December 31, | |||||||
2017 | 2016 | ||||||
(in thousands) | |||||||
Location: | |||||||
United States | $ | 23,396 | $ | 29,420 | |||
International | 11,636 | 14,670 | |||||
Total property and equipment, net | $ | 35,032 | $ | 44,090 | |||
For the Quarter Ended | |||||||||||||||
March 31, 2017 | June 30, 2017 | September 30, 2017 | December 31, 2017 | ||||||||||||
(in thousands, except per share data) | |||||||||||||||
Revenues | $ | 267,907 | $ | 313,221 | $ | 243,273 | $ | 199,112 | |||||||
Gross profit | 133,584 | 169,807 | 123,463 | 90,367 | |||||||||||
Income (loss) from operations | 15,582 | 29,446 | 2,685 | (30,377 | ) | ||||||||||
Net income (loss) | 11,010 | 21,960 | 1,629 | (24,361 | ) | ||||||||||
Net income (loss) attributable to common shareholders | 7,155 | 18,086 | (2,263 | ) | (28,272 | ) | |||||||||
Basic income (loss) per common share | $ | 0.08 | $ | 0.21 | $ | (0.03 | ) | $ | (0.41 | ) | |||||
Diluted income (loss) per common share | $ | 0.08 | $ | 0.20 | $ | (0.03 | ) | $ | (0.41 | ) | |||||
For the Quarter Ended | |||||||||||||||
March 31, 2016 | June 30, 2016 | September 30, 2016 | December 31, 2016 | ||||||||||||
(in thousands, except per share data) | |||||||||||||||
Revenues | $ | 279,140 | $ | 323,828 | $ | 245,888 | $ | 187,417 | |||||||
Gross profit | 129,366 | 169,640 | 122,434 | 78,724 | |||||||||||
Income (loss) from operations | 14,243 | 20,605 | (1,215 | ) | (39,787 | ) | |||||||||
Net income (loss) | 10,146 | 15,537 | (1,533 | ) | (40,644 | ) | |||||||||
Net income (loss) attributable to common shareholders | 6,361 | 11,735 | (5,352 | ) | (44,482 | ) | |||||||||
Basic income (loss) per common share | $ | 0.07 | $ | 0.13 | $ | (0.07 | ) | $ | (0.60 | ) | |||||
Diluted income (loss) per common share | $ | 0.07 | $ | 0.13 | $ | (0.07 | ) | $ | (0.60 | ) | |||||
• | Due to the seasonal nature of our products, we experience decreased revenues in the fourth quarter of the year relative to the other quarters. |
• | Income from operations for the quarter ended December 31, 2017 improved by $9.4 million compared to the fourth quarter of 2016, primarily driven by higher revenues, partially offset by additional charges of $6.3 million related to a noncash write-off and contract termination fee for a discontinued project. |
• | Due to the seasonal nature of our products, we experience decreased revenues in the fourth quarter relative to the other quarters. For the quarter ended December 31, 2016 revenue decreased 10.2% as compared to the same quarter of the prior year which was primarily driven by a decrease in sales in the Wholesale and Retail segments. |
• | Income from operations for the quarter ended June 30, 2016 was negatively impacted by an increase of $18.3 million in marketing expense related to the Spring/Summer line advertising campaigns. ‘Selling, general and administrative’ expenses, otherwise, remained relatively constant across the quarters, with some fluctuation between periods in relation to contingent rent expense that is driven by sales. |
Balance at Beginning of Period | Charged to Costs and Expenses | Deductions | Balance at End of Period | ||||||||||||
(in thousands) | |||||||||||||||
Year Ended December 31, 2017 | |||||||||||||||
Allowance for doubtful accounts | $ | 32,856 | $ | 1,235 | $ | (15,766 | ) | $ | 18,325 | ||||||
Reserve for sales returns and allowances | 6,121 | 65,562 | (66,700 | ) | 4,983 | ||||||||||
Reserve for unapplied rebates | 9,161 | 9,318 | (10,398 | ) | 8,081 | ||||||||||
Total | $ | 48,138 | $ | 76,115 | $ | (92,864 | ) | $ | 31,389 | ||||||
Year Ended December 31, 2016 | |||||||||||||||
Allowance for doubtful accounts | $ | 36,368 | $ | 6,079 | $ | (9,591 | ) | $ | 32,856 | ||||||
Reserve for sales returns and allowances | 4,639 | 72,995 | (71,513 | ) | 6,121 | ||||||||||
Reserve for unapplied rebates | 8,357 | 9,036 | (8,232 | ) | 9,161 | ||||||||||
Total | $ | 49,364 | $ | 88,110 | $ | (89,336 | ) | $ | 48,138 | ||||||
Year Ended December 31, 2015 | |||||||||||||||
Allowance for doubtful accounts | $ | 13,609 | $ | 26,225 | $ | (3,466 | ) | $ | 36,368 | ||||||
Reserve for sales returns and allowances | 7,214 | 71,649 | (74,224 | ) | 4,639 | ||||||||||
Reserve for unapplied rebates | 11,569 | 11,106 | (14,318 | ) | 8,357 | ||||||||||
Total | $ | 32,392 | $ | 108,980 | $ | (92,008 | ) | $ | 49,364 | ||||||
CROCS, INC. By: /s/ Carrie W. Teffner____________________ Name: Carrie W. Teffner Title: Chief Financial Officer |
CROCS RETAIL, LLC By: /s/ Carrie W. Teffner____________________ Name: Carrie W. Teffner Title: Manager |
OCEAN MINDED, INC. By: /s/ Carrie W. Teffner____________________ Name: Carrie W. Teffner Title: Chief Financial Officer |
JIBBITZ, LLC By: /s/ Carrie W. Teffner____________________ Name: Carrie W. Teffner Title: Manager |
BITE, INC. By: /s/ Carrie W. Teffner____________________ Name: Carrie W. Teffner Title: Chief Financial Officer GUARANTORS: WESTERN BRANDS HOLDING COMPANY, LLC By: /s/ Carrie W. Teffner____________________ Name: Carrie W. Teffner Title: Manager |
PNC BANK, NATIONAL ASSOCIATION, as a Lender and as Administrative Agent By: /s/ Steve C. Roberts_____________________ Name: Steve C. Roberts Title: Senior Vice President KEYBANK NATIONAL ASSOCIATION, as a Lender By: /s/ Dru Steinly-Chiesa____________________ Name: Dru Steinly-Chiesa Title: Senior Vice President |
HSBC BANK USA, N.A., as a Lender By: /s/ Andy Reidell________________________ Name: Andy Reidell Title: |
Lender | Amount of Commitment for Revolving Credit Loans | Commitment | Ratable Share | |
PNC Bank, National Association 2 North Lake Avenue, Suite 440 Pasadena, CA 91101 Attention: Steve Roberts Telephone: 626-432-6128 Facsimile: 626-432-4589 | $70,000,000 | $70,000,000 | 70% | |
KeyBank National Association | ||||
Commercial Banking 1675 Broadway, Suite 300 Denver, CO 80202 Attention: Dru Steinly-Chiesa | ||||
Facsimile: 720-904-4515 Telephone: 720-904-4509 | $25,000,000 | $25,000,000 | 25 | % |
$5,000,000 | $5,000,000 | 5% | ||
Total | $100,000,000 | $100,000,000 | 100 | % |
2. | Attached as Schedule “B” is a list of any patents, trademarks, service marks, trade names, copyrights and other registered intellectual property, that the Loan Parties’ have acquired since delivery of the of the most recent Compliance Certificate, |
3. | Attached as Schedule “C” is a list of any intellectual property which the Loan Parties have abandoned or otherwise disposed of (or propose to dispose of)since delivery of the most recent Compliance Certificate. |
4. | No Potential Default exists on the date hereof, other than: _________________________ [if none, so state, if a Potential Default exists, state steps being taken with respect to such Potential Default]; and |
5. | No Event of Default exists on the date hereof, other than: __________________ [if none, so state, if an Event of Default exists, state steps being taken with respect to such Event of Default]. |
6. | No proceeds of other Indebtedness (whether such Indebtedness was incurred by a Borrower or a Subsidiary of any Borrower) was used during the applicable fiscal quarter to reduce the Revolving Credit Loans. |
CROCS, INC. By: /s/ CARRIE W. TEFFNER Name: Carrie W. Teffner Title: Chief Financial Officer | |
CROCS RETAIL, LLC By: /s/ CARRIE W. TEFFNER Name: Carrie W. Teffner Title: Manager | |
OCEAN MINDED, INC. By: /s/ CARRIE W. TEFFNER Name: Carrie W. Teffner Title: Chief Financial Officer | |
JIBBITZ, LLC By: /s/ CARRIE W. TEFFNER Name: Carrie W. Teffner Title: Manager | |
BITE, INC. By: /s/ CARRIE W. TEFFNER Name: Carrie W. Teffner Title: Chief Financial Officer | |
WESTERN BRANDS HOLDING COMPANY, LLC By: /s/ CARRIE W. TEFFNER Name: Carrie W. Teffner Title: Manager | |
PNC BANK, NATIONAL ASSOCIATION, as a Lender and as Administrative Agent By: /s/ STEVE C. ROBERTS Name: Steve C. Roberts Title: Senior Vice President | |
KEYBANK NATIONAL ASSOCIATION, as a Lender By: /s/ DRU S. CHIESA Name: Dru S. Chiesa Title: Senior Vice President | |
HSBC BANK USA, N.A., as a Lender By: /s/ JEAN FRAMMOLINO Name: Jean Frammolino Title: Senior Vice President | |
Subsidiary | Jurisdiction | |
4246519 Canada Inc. | Canada | |
Bite, Inc. | Colorado | |
Crocs Asia Pte Ltd. | Singapore | |
Crocs Austria GmbH | Austria | |
Crocs Australia Pty Ltd. | Australia | |
Crocs Belgium NV | Belgium | |
“CROCS BH” d.o.o. Kotor Varoš | Bosnia-Herzgovina | |
Crocs Brasil Comércio de Calçados Ltda. | Brazil | |
Crocs Canada Inc. | Canada | |
Crocs Distribution FZE | Dubai | |
Crocs Europe B.V. | Netherlands | |
Crocs Europe Stores S.L. | Spain | |
Crocs Footwear & Accessories (Shanghai) Co., Ltd. | China | |
Crocs Footwear (Malaysia) Sdn. Bhd. | Malaysia | |
Crocs France S.A.R.L. | France | |
Crocs General Partner LLC | Delaware | |
Crocs Germany GmbH | Germany | |
Crocs Gulf L.L.C | UAE | |
Crocs Hong Kong Ltd. | Hong Kong | |
Crocs India Private Limited | India | |
Crocs Industrial (Hong Kong) Co. Ltd. | Hong Kong | |
Crocs Industrial (Shenzhen) Co. Ltd. | China | |
Crocs Italy S.r.l. | Italy | |
Crocs Japan GK | Japan | |
Crocs Japan GK | Taiwan | |
Crocs Korea Inc | South Korea | |
Crocs México, S. de R.L. de C.V. | Mexico | |
Crocs México Trading Company, S. de R.L. de C.V. | Mexico | |
Crocs Middle East FZE | UAE | |
Crocs Nordic OY | Finland | |
Crocs NZ Limited | New Zealand | |
Crocs Portugal, Lda. | Portugal | |
Crocs Puerto Rico, Inc. | Puerto Rico | |
Crocs Retail, LLC | Colorado | |
Crocs Servicios México, S. de R.L. de C.V. | Mexico | |
Crocs Singapore Pte Ltd. | Singapore | |
Crocs S.R.L. | Argentina | |
Crocs Stores AB | Sweden | |
Crocs Stores B.V. | Netherlands | |
Crocs Stores OY | Finland | |
Crocs Stores Ireland Limited | Ireland | |
Crocs Trading (Shanghai) Co. Ltd. | China | |
Crocs UK Limited | United Kingdom | |
Crocs US Latin American Holdings, LLC | Delaware | |
Crocs Vietnam Limited Liability Company | Vietnam | |
Colorado Footwear C.V. | Netherlands | |
Exo Italia S.R.L. | Italy | |
Jibbitz LLC | Colorado | |
LLC Crocs CIS | Russia | |
Ocean Minded, Inc. | Colorado | |
Panama Footwear Distribution S. De R.L. | Panama | |
Western Brands Holding Company, LLC | Colorado | |
Western Brands Netherlands Holding C.V. | Netherlands | |
Date: February 28, 2018 | /s/ ANDREW REES | |
Andrew Rees | ||
President and Chief Executive Officer | ||
Date: February 28, 2018 | /s/ CARRIE W. TEFFNER | |
Carrie W. Teffner | ||
Executive Vice President and Chief Financial Officer | ||
Date: February 28, 2018 | /s/ ANDREW REES | |
Andrew Rees | ||
President and Chief Executive Officer | ||
/s/ CARRIE W. TEFFNER | ||
Carrie W. Teffner | ||
Executive Vice President and Chief Financial Officer | ||
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Document And Entity Information - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2017 |
Feb. 20, 2018 |
Jun. 30, 2017 |
|
| Document And Entity Information[Abstract] | |||
| Document Type | 10-K | ||
| Amendment Flag | false | ||
| Document Period End Date | Dec. 31, 2017 | ||
| Document Fiscal Period Focus | FY | ||
| Document Fiscal Year Focus | 2017 | ||
| Entity Registrant Name | Crocs, Inc. | ||
| Entity Central Index Key | 0001334036 | ||
| Current Fiscal Year End Date | --12-31 | ||
| Entity Well-known Seasoned Issuer | No | ||
| Entity Current Reporting Status | Yes | ||
| Entity Voluntary Filers | No | ||
| Entity Filer Category | Accelerated Filer | ||
| Common stock outstanding (shares) | 68,830,820 | ||
| Trading Symbol | CROX | ||
| Entity Public Float | $ 432.1 |
Consolidated Statements Of Comprehensive Income (Loss) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
| Statement of Comprehensive Income [Abstract] | |||
| Net income (loss) | $ 10,238 | $ (16,494) | $ (83,196) |
| Other comprehensive income (loss): | |||
| Foreign currency gain (loss), net | 12,202 | (4,683) | (32,561) |
| Total comprehensive income (loss) | $ 22,440 | $ (21,177) | $ (115,757) |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Allowances | $ 31,389 | $ 48,138 |
| Accumulated depreciation | $ 91,806 | $ 88,603 |
| Series A preferred shares outstanding (shares) | 200,000 | 200,000 |
| Series A preferred shares, liquidation preference | $ 203,000 | $ 203,000 |
| Preferred shares, par value (in dollars per share) | $ 0.001 | $ 0.001 |
| Preferred shares authorized (shares) | 4,000,000.0 | |
| Preferred shares outstanding (shares) | 0 | 0 |
| Common shares, par value (in dollars per share) | $ 0.001 | $ 0.001 |
| Common shares issued (shares) | 94,800,000 | 93,900,000 |
| Common shares outstanding (shares) | 68,800,000 | 73,600,000 |
| Treasury stock (shares) | 26,000,000 | 20,300,000 |
Basis of Presentation and Summary of Significant Accounting Policies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basis of Presentation and Summary of Significant Accounting Policies | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Unless otherwise noted in this report, any description of “the Company,” “Crocs,” “we,” “us,” or “our” includes Crocs, Inc. and its consolidated subsidiaries within our reportable operating segments and corporate operations. The Company is engaged in the design, development, manufacturing, worldwide marketing, distribution, and sale of casual lifestyle footwear and accessories for men, women, and children. We strive to be the global leader in the sale of molded footwear characterized by functionality, comfort, color, and lightweight design. Our reportable operating segments include: the Americas, operating in North and South America; Asia Pacific, operating throughout Asia, Australia, New Zealand, Africa, and the Middle East; and Europe, operating throughout Western Europe, Eastern Europe, and Russia. Basis of Presentation and Consolidation The Company’s consolidated financial statements include its accounts and those of its wholly-owned subsidiaries, and reflect all adjustments which are necessary for a fair statement of financial position, results of operations, and cash flows for the periods presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates Our consolidated financial statements are prepared in accordance with U.S. GAAP. These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions used to determine certain amounts that affect the financial statements are reasonable, based on information available at the time they are made. Management believes that the estimates, judgments, and assumptions made when accounting for items and matters such as, but not limited to, the allowance for doubtful accounts, customer rebates, sales returns, impairment assessments and charges, recoverability of assets (including deferred tax assets), uncertain tax positions, income tax expense, share-based compensation expense, the assessment of lower of cost or net realizable value on inventory, useful lives assigned to long-lived assets, depreciation, and provisions for contingencies are reasonable based on information available at the time they are made. Management also makes estimates in the assessments of potential losses in relation to tax matters and threatened or pending legal proceedings (see Note 11 — Income Taxes and Note 15 — Legal Proceedings).To the extent there are differences between these estimates and actual results, our consolidated financial statements may be materially affected. Reclassifications The Company has reclassified certain amounts on the consolidated statements of operations, consolidated balance sheets, consolidated statements of cash flows, and Note 7 — Derivative Financial Instruments to conform to current period presentation. Transactions with Affiliates The Company receives services from three subsidiaries of Blackstone Capital Partners VI L.P. (“Blackstone”). Blackstone and certain of its permitted transferees currently beneficially own all the outstanding shares of the Company’s Series A Convertible Preferred Stock, which is convertible into approximately 16.7% of the Company’s common stock as of December 31, 2017. Blackstone also has the right to nominate two representatives to serve on the Company’s Board of Directors (the “Board”). Certain Blackstone subsidiaries provide various services to the Company, including inventory count, cybersecurity and consulting, and workforce management services. The Company incurred expenses of $0.7 million, $0.8 million, and $0.9 million for the years ended December 31, 2017, 2016, and 2015 respectively, for these services, which are reported in ‘Selling, general and administrative expenses’ in the consolidated statements of operations. Revenue Recognition Revenue is recognized when persuasive evidence of an arrangement exists, the significant risks and rewards of ownership, including title and risk of loss, are transferred to the customer or distributor, the collection of the related receivables is probable, and the selling price is fixed or determinable. Title passes on shipment to or on receipt by the customer depending on the country in which the sale occurs and the agreement terms with the customer. We also may accept returns from our wholesale customers, on an exception basis, to ensure that our products are merchandised in the proper assortments. The estimated costs of sales incentives, discounts, returns, price promotions, rebates, and loyalty and coupon programs are reported as a reduction of revenues. Shipping and Handling Costs and Fees Shipping and handling costs are expensed as incurred and are included in ‘Cost of sales’ in the consolidated statements of operations. Shipping and handling fees billed to customers are included in revenues. Taxes Assessed by Governmental Authorities Taxes assessed by governmental authorities that are directly imposed on a revenue transaction, including value added tax, are recorded on a net basis and are therefore excluded from revenues. Cost of Sales Our cost of sales includes costs incurred to design, produce, and ship our footwear. These costs include our raw materials, both direct and indirect labor, shipping and handling including freight costs, utilities, maintenance costs, depreciation, packaging, and other manufacturing overheads and costs. Research, Design, and Development Expenses We continue to dedicate significant resources to product design and development based on opportunities we identify in the marketplace. We incurred expenses of $13.4 million, $11.9 million, and $14.0 million in research, design, and development activities for the years ended December 31, 2017, 2016, and 2015, respectively, which are expensed as incurred and are reported in ‘Selling, general and administrative expenses’ in the consolidated statements of operations. Selling, General and Administrative Expenses Our selling, general and administrative expenses include media advertising (television, radio, print, social, digital), tactical advertising (signs, banners, point-of-sale materials) and promotional costs. Advertising production costs are expensed when the advertising is first run. Advertising communication costs are expensed in the periods that the communications occur. Certain of the Company’s promotional expenses result from payments under endorsement contracts. Expenses under endorsement contracts are expensed on a straight-line basis over the related annual contract terms. Total marketing expenses, inclusive of advertising, production, promotion, and agency expenses, were $59.1 million, $56.0 million, and $58.2 million for the years ended December 31, 2017, 2016, and 2015, respectively. Prepaid advertising and promotional endorsement costs of $7.0 million and $4.5 million, were included in other current assets in the consolidated balance sheets at December 31, 2017 and 2016, respectively. Selling, general and administrative expenses also include costs for our marketing and sales organizations, and other functions including finance, legal, human resources and information technology. Selling, general and administrative expenses consist primarily of labor and outside services, bad debt expense, legal costs, amortization of intangible assets, as well as certain depreciation costs related to non-production equipment and share-based compensation. Other Income, Net Other income, net primarily includes gains and losses associated with activities not directly related to making and selling footwear, as well as certain gains or losses on sales of non-operating assets. Foreign Currency Gain (Loss), Net Foreign currency gain (loss), net includes realized and unrealized foreign exchange gains and losses resulting from remeasurement and settlement of foreign-currency transactions denominated in a currency other than the functional currency of an entity, and realized and unrealized gains and losses on forward foreign exchange derivative contracts. Realized foreign exchange gains and losses are reported in the operating segment in which they occur. Foreign exchange gains and losses on intercompany balances and forward foreign exchange derivative contracts are reported within the Corporate segment. Other Comprehensive Income (Loss) Our foreign subsidiaries use their foreign currency as their functional currency. Functional currency assets and liabilities are translated into U.S. dollars using exchange rates in effect at the balance sheet date, and revenues and expenses are translated at average exchange rates during the period. Resulting translation gains and losses are reported in other comprehensive income (loss) (“OCI”), until the substantial disposition of a subsidiary, at which time accumulated translation gains or losses are reclassified into net income. Our OCI consists entirely of cumulative translation gains and losses. Income Taxes Income taxes are accounted for using the asset and liability method which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of other assets and liabilities. We provide for income taxes at the current and future enacted tax rates and laws applicable in each taxing jurisdiction. We use a two-step approach for recognizing and measuring tax benefits taken or expected to be taken in a tax return and disclosures regarding uncertainties in income tax positions. We recognize interest and penalties related to income tax matters in income tax expense in the consolidated statement of operations. See Note 11 — Income Taxes for further discussion. Taxes Assessed by Governmental Authorities Taxes assessed by governmental authorities that are directly imposed on a revenue transaction, including value added tax, are recorded on a net basis and are therefore excluded from sales. Cash and Cash Equivalents Cash and cash equivalents represent cash and short-term, highly-liquid investments with maturities of three months or less at the date of purchase. The Company reports receivables from credit card companies, if expected to be received within five days, in cash and cash equivalents. Restricted Cash Restricted cash primarily consists of funds to secure certain retail store leases, certain customs requirements, and other contractual arrangements. Consolidated Statements of Cash Flows - Supplemental Schedule of Non-Cash Investing and Financing Activities
Accounts Receivable, Net Accounts receivable are recorded at invoiced amounts, net of reserves and allowances. The Company reduces the carrying value for estimated uncollectible accounts based on a variety of factors including the length of time receivables are past due, economic trends and conditions affecting the Company’s customer base, and historical collection experience. Specific provisions are recorded for individual receivables when the Company becomes aware of a customer’s inability to meet its financial obligations. The Company writes off accounts receivable to the reserves when they are deemed uncollectible or, in certain jurisdictions, when legally able to do so. See Item 15, Schedule II for more information. Inventories Inventories are valued at the lower of cost or net realizable value. We regularly evaluate inventory and estimate net realizable value using several assumptions including estimated future demand and market conditions, as well as other observable factors such as current sell-through of the Company’s products, recent changes in product demand, global and regional economic conditions, historical experience selling through liquidation and price discounted channels, and the amount of inventory on hand. If the estimated inventory net realizable value is less than its carrying value, the carrying value is adjusted to net realizable value and the resulting charge is recorded in ‘Cost of sales’ in the consolidated statements of operations. As of December 31, 2017 and 2016, our finished goods inventories accounted for approximately 97.5% and 96.8%, respectively, of our consolidated inventories, with the remaining balance comprised of raw materials and work-in-process. Property and Equipment, Net Property, equipment, furniture, and fixtures are stated at original cost, less accumulated depreciation. Depreciation is provided using the straight-line method over the estimated useful asset lives, which are reviewed periodically and have the following ranges: machinery and equipment: 2 to 5 years; furniture, fixtures, and other: 2 to 10 years. Leasehold improvements are stated at cost and amortized on the straight-line basis over their estimated economic useful lives or the lease term, whichever is shorter. Costs of enhancements or modifications that substantially extend the capacity or useful life of an asset are capitalized and depreciated accordingly. Ordinary repairs and maintenance are expensed as incurred. Depreciation of manufacturing assets is included in cost of sales in our consolidated statements of operations. Depreciation related to corporate, non-product, and non-manufacturing assets is included in ‘Selling, general and administrative expenses’ in our consolidated statements of operations. When property is retired or otherwise disposed of, the cost and accumulated depreciation are removed from our consolidated balance sheets and the resulting gain or loss, if any, is reflected in ‘Income (Loss) from operations’ in the consolidated statements of operations. Properties held under capital lease are depreciated using the straight-line method over the estimated useful life or the lease term, whichever is shorter. Goodwill and Other Intangible Assets, Net We evaluate the carrying value of our goodwill and indefinite-lived intangible assets for impairment at the reporting unit level at least annually or when an interim triggering event has occurred indicating potential impairment. Our annual test is performed as of the last day of our fiscal fourth quarter. We continuously monitor the performance of our definite-lived intangible assets and evaluate for impairment when evidence exists that certain events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Significant judgments and assumptions are required in such impairment evaluations. Definite-lived intangible assets are stated at cost, less accumulated amortization. Amortization is recorded using the straight-line method over the estimated lives of the assets. Direct costs of acquiring or developing internal-use computer software, including costs of employees, are capitalized and classified within intangible assets. Software maintenance and training costs are expensed in the period incurred. Initial costs associated with internally-developed-and-used software are expensed until it is determined that the project has reached the application development stage, after which subsequent additions, modifications, or upgrades are capitalized to the extent that they add functionality. The Company’s capitalized software consists primarily of enterprise resource system software, warehouse management software, and point of sale software. Amortization for software is provided using the straight-line method over the estimated useful asset lives, which are reviewed periodically and range from 2 to 7 years. Amortization of capitalized software used in manufacturing activities is included in ‘Cost of sales’ in the consolidated statements of operations. Amortization related to corporate, non-product, and non-manufacturing assets, such as the Company’s global information systems, is included in ‘Selling, general, and administrative expenses’ in the consolidated statements of operations. Amortization for patents, copyrights, and trademarks is provided using the straight-line method over the estimated useful asset lives, which are reviewed periodically and range from 7 to 25 years. Impairment of Long-Lived Assets Long-lived assets to be held and used are evaluated for impairment when events or circumstances indicate the carrying value of a long-lived asset or asset group is less than the undiscounted cash flows from its use and eventual disposition over its remaining economic life. The Company assesses recoverability by comparing the sum of projected undiscounted cash flows from the use and eventual disposition over the remaining economic life of a long-lived asset or asset group to its carrying value, and records a loss from impairment if the carrying value is more than its undiscounted cash flows. For assets involved in Crocs’ retail business, the asset group is at the retail store level. As retail store performance will vary in new and existing markets due to many factors, including maturity of the market and brand recognition, we periodically evaluate the fixed assets and leasehold improvements related to our retail locations for impairment. Assets or asset groups to be abandoned or from which no future benefit is expected are written down to zero in the period it is determined they will no longer be used and are removed entirely from service. See Note 3 — Property and Equipment, Net for a discussion of impairment losses recorded during the periods presented. Share-Based Compensation The Company’s share-based compensation plans provides for stock options, restricted stock, and stock performance awards to be granted to plan participants, which includes certain officers, employees, and members of the Board. The grant date fair value of awards granted under these plans is amortized over the vesting period using the straight-line method. The grant date fair value of stock options is calculated using a Black Scholes option pricing model. The grant date fair value of time-based restricted stock units (“RSUs”) and restricted stock awards (“RSAs”) is based on the closing market price of our common stock on the grant date, adjusted for dividend rights during the vesting period; the grant date fair value of performance-based RSUs is estimated using a Monte Carlo simulation valuation model. Share-based compensation expense associated with manufacturing and retail employees is included in ‘Cost of sales’ in the consolidated statements of operations. Share-based compensation expense associated with selling, marketing, and administrative employees is included in ‘Selling, general and administrative expenses’ in the consolidated statements of operations. See also Note 10 — Share-Based Compensation for additional information related to share-based compensation. Earnings per Share Basic and diluted earnings per common share (“EPS”) is presented using the two-class method. Participating securities are included in the computation of EPS on a pro-rata, if-converted basis. Diluted EPS reflects the potential dilution to common shareholders from securities that could share in the Company’s earnings. The dilutive effect of each participating security, if any, is calculated using the more dilutive of the two-class method described above. Anti-dilutive securities are excluded from diluted EPS. See Note 12 — Earnings per Share for additional information. Derivative Foreign Currency Contracts The Company enters into foreign currency forward contracts (“contracts”) to mitigate the potential impact of foreign currency exchange rate risk. By policy, the Company does not enter into these contracts for trading purposes or speculation. The fair value of the contracts is reported either as an asset or liability in our consolidated balance sheets. Changes in the fair value of our contracts are recorded in ‘Foreign currency gain (loss), net’ in our consolidated statements of operations. The Company did not designate any derivative instruments for hedge accounting during any of the periods presented. See Note 7 — Derivative Financial Instruments for further information. Foreign Currency Translation and Remeasurement The financial position and operating results of the Company’s foreign operations are reported using their respective local currency as the functional currency. The Company recognizes and reports remeasurement gains and losses within ‘Foreign currency gain (loss), net’ in the consolidated statements of operations. Fair Value U.S. GAAP for fair value establishes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques (market approach, income approach, and cost approach). The Company utilizes a combination of market and income approaches to value derivative instruments. The Company’s financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels of the hierarchy and the related inputs are as follows:
We categorize fair value measurements within the fair value hierarchy based upon the lowest level of the most significant inputs used to determine fair value. The Company’s non-financial assets, which primarily consist of property and equipment, goodwill, and other intangible assets, are not required to be carried at fair value on a recurring basis and are reported at carrying value. However, on a periodic basis or whenever events or changes in circumstances indicate that their carrying value may not be fully recoverable (and at least annually for goodwill and indefinite-lived intangible assets), non-financial instruments are assessed for impairment and, if applicable, written down to and recorded at fair value. See Note 6 — Fair Value Measurements for further discussion related to fair value measurements. |
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Recent Accounting Pronouncements |
12 Months Ended |
|---|---|
Dec. 31, 2017 | |
| Accounting Policies [Abstract] | |
| Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS New Accounting Pronouncement Adopted Inventory Measurement In July 2015, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance to measure in-scope inventory at the lower of cost or net realizable value. The Company adopted this guidance on January 1, 2017 on a prospective basis. The adoption did not have a significant effect on our consolidated financial position or results of operations. New Accounting Pronouncements Not Yet Adopted Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In February 2018, the FASB issued authoritative guidance that permits reclassification of the income tax effects of the 2017 U.S. Tax Cuts and Jobs Act (“Tax Act”) on other accumulated comprehensive income (“AOCI”) to retained earnings. This guidance may be adopted retrospectively to each period (or periods) in which the income tax effects of the Tax Act related to items remaining in AOCI are recognized, or at the beginning of the period of adoption. The guidance becomes effective for for annual periods beginning after December 15, 2018, including interim periods within those annual periods, with early adoption permitted. The Company is currently assessing the adoption method and the impact that adopting this new accounting standard will have on its consolidated financial statements. Stock Compensation Scope of Modification Accounting In May 2017, the FASB issued authoritative guidance intended to clarify those changes to terms and conditions of share-based compensation awards that are required to be accounted for as modifications of existing share-based awards. This guidance is to be applied prospectively and becomes effective for annual reporting periods beginning after December 15, 2017, including interim periods within those periods, with early adoption permitted during any interim period. The Company does not expect this standard will have a material impact on the Company’s consolidated financial statements. Clarifying the Definition of a Business In January 2017, the FASB issued authoritative guidance intended to clarify the definition of a business, for purposes of determining whether a business has been acquired or sold, and consequently whether transactions should be accounted for as acquisitions or disposals of a business or as acquisitions or disposals of assets. This guidance is to be applied prospectively and becomes effective for annual reporting periods beginning after December 15, 2017, including interim periods within those periods. The Company does not expect this standard to have a material impact on its consolidated financial statements. Statement of Cash Flows - Classification and Change in Restricted Cash In August 2016, the FASB issued authoritative guidance intended to clarify how entities should classify certain cash receipts and cash payments on the statement of cash flows. Further, in November 2016, the FASB issued guidance requiring that restricted cash be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown in the statement of cash flows. These updates are effective for annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods, with early adoption permitted, and will be applied retrospectively to all periods presented. The Company will implement this standard beginning in the quarter ended March 31, 2018 and the impact will result in a change in financial statement presentation and disclosure within the statement of cash flows. Prepaid Stored-Value Products In March 2016, the FASB issued guidance related to the recognition of breakage for certain prepaid stored-value products. This update aligns recognition of the financial liabilities related to prepaid stored-value products (for example, prepaid gift cards), with Topic 606, Revenue from Contracts with Customers, for non-financial liabilities. In general, certain of these liabilities may be extinguished proportionally in earnings as redemptions occur, or when redemption is remote if issuers are not entitled to the unredeemed stored value. This standard is effective for annual periods (including interim periods) beginning after December 15, 2017, with early adoption permitted. The Company has elected the modified retrospective method of adoption. The Company has completed a review of its prepaid stored-value products and has determined that the impact of adoption is immaterial to the consolidated financial statements. Leases In February 2016, the FASB issued authoritative guidance intended to increase transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet and disclosing key information about leasing arrangements. Under the new guidance, lessees will be required to recognize a right-of-use asset and a lease liability, measured on a discounted basis, at the commencement date for all leases with terms greater than twelve months. Additionally, this guidance will require disclosures to help investors and other financial statement users to better understand the amount, timing, and uncertainty of cash flows arising from leases, including qualitative and quantitative requirements. The guidance should be applied under a modified retrospective transition approach for leases existing at the beginning of the earliest comparative period presented in the adoption-period financial statements. This guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those annual periods, with early adoption permitted. The Company will adopt this guidance beginning with the quarterly reporting period ending March 31, 2019. In July 2017, the Company established an implementation team and engaged external advisers to develop a multi-phase plan to assess the Company’s leasing arrangements, as well as any changes to accounting policies, processes or information systems necessary to adopt the requirements of the new standard. The Company is evaluating the full impact this guidance will have on its consolidated financial statements, and expects that adoption will result in significant increases in lease-related assets and liabilities on its consolidated balance sheet. Revenue Recognition In May 2014, the FASB issued authoritative guidance related to new accounting requirements for the recognition of revenue from contracts with customers. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for the goods or services. Subsequent to the release of this guidance, the FASB has issued additional updates intended to provide interpretive clarifications and to reduce the cost and complexity of applying the new revenue recognition standard both at transition and on an ongoing basis. The new standard and related amendments are effective for annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods. In December 2016, the Company established an implementation team and engaged external advisers to develop a multi-phase plan to assess the Company’s business and contracts, as well as any changes to accounting policies, processes or information systems necessary to adopt the requirements of the new standard. The Company has elected the modified retrospective method of adoption. The Company has completed a review of its revenue contracts and terms and has determined that the impact of adoption is immaterial to the consolidated financial statements. Concurrent with adoption, the Company will change its presentation of product returns in the consolidated balance sheets by reporting an asset for the right to receive returned product and a return liability. In addition, customer payments received in advance of delivery will be reported as a contract liability in the Company’s consolidated balance sheets. The Company will provide additional information along with required disclosures in its consolidated financial statements in its quarterly report for the period ended March 31, 2018. Other Pronouncements Other new pronouncements issued but not effective until after December 31, 2017 are not expected to have a material impact on the Company’s consolidated financial statements. |
Property and Equipment, Net |
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| Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property and Equipment, Net | PROPERTY AND EQUIPMENT, NET Property and equipment, net consists of the following:
Asset Retirement Obligations The Company is contractually obligated under certain of its lease agreements to restore certain retail and office facilities back to their original condition. At lease inception, the estimated fair value of these liabilities is recorded along with a related asset. At December 31, 2017 and 2016, liabilities for asset retirement obligations were $3.1 million and $2.8 million, respectively, and are reported in ‘Other liabilities’ in the consolidated balance sheets. Depreciation and Amortization Expense Depreciation and amortization expense related to property and equipment, reported in ‘Cost of sales’ and ‘Selling, general and administrative expenses’ was:
Gains/Losses on Disposals The Company recognized net gains on disposals of property and equipment of $0.8 million for the year ended December 31, 2017 and net losses on disposals of property of $0.5 million, and $1.4 million, respectively, for the years ended December 31, 2016 and 2015, which are included in ‘Selling, general and administrative expenses’ in the consolidated statement of operations. Asset Impairments During the years ended December 31, 2017, 2016, and 2015, the Company recorded impairments of $0.5 million, $2.7 million, and $9.6 million, respectively, for underperforming retail stores. During the year ended December 31, 2015, an additional impairment of $5.7 million related to the disposal of the Company's business in South Africa was recorded. Long-lived asset impairments by reportable operating segment, were:
(1) In 2015, the Company recorded impairment of nine retail stores in South Africa of $5.7 million. |
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Goodwill and Intangible Assets, Net |
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| Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets, Net | GOODWILL AND INTANGIBLE ASSETS, NET Goodwill All of our goodwill is in the Europe segment. The changes in goodwill for the years ended December 31, 2017 and 2016 were:
Accumulated goodwill impairment at December 31, 2017 was $0.8 million. Intangible Assets, Net ‘Intangible assets, net’ reported in the consolidated balance sheets consist of the following:
(1) In the year ended December 31, 2017, we recorded a write-off of $4.8 million for a discontinued project. At December 31, 2017, the weighted average remaining useful life of intangibles subject to amortization was approximately 6.5 years. Amortization Expense Amortization expense related to definite-lived intangible assets, reported in ‘Cost of sales’ and ‘Selling, general and administrative expenses’ was:
Estimated future annual amortization expense of intangible assets is:
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Accrued Expenses And Other Liabilities |
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| Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accrued Expenses And Other Liabilities | ACCRUED EXPENSES AND OTHER LIABILITIES Amounts reported in ‘Accrued expenses and other liabilities’ in the consolidated balance sheets were:
(1) Includes customs duty legal accrual liability at December 31, 2016, which was settled in April 2017. (2) Includes current liabilities related to Series A Preferred Stock dividends at December 31, 2017 and 2016. Other accrued liabilities at December 31, 2017 and 2016 also includes net derivative liabilities. |
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Fair Value Measurements |
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| Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Measurements | FAIR VALUE MEASUREMENTS Recurring Fair Value Measurements The financial assets and liabilities that are measured and recorded at fair value on a recurring basis consist of the Company’s derivative instruments. The Company’s derivative instruments are foreign currency forward exchange contracts. The Company manages credit risk of its derivative instruments on the basis of its net exposure with its counterparty. All of the Company’s derivative instruments are classified as Level 2 and are reported in the consolidated balance sheets within ‘Accrued expenses and other liabilities’ at December 31, 2017 and 2016. The fair values of the Company’s derivative instruments were liabilities of $0.4 million and $0.2 million at December 31, 2017 and 2016, respectively. See Note 7 — Derivative Financial Instruments for more information. The carrying amounts of the Company’s cash and cash equivalents, accounts receivable, accounts payable, and current accrued expenses and other liabilities approximate their fair value as recorded due to the short-term maturity of these instruments. The Company’s borrowing instruments are recorded at their carrying values in the consolidated balance sheets, which may differ from their respective fair values. The fair values of the Company’s outstanding notes payable approximate their carrying values at December 31, 2017 and 2016, based on interest rates currently available to the Company for similar borrowings and were:
Non-Financial Assets and Liabilities The Company’s non-financial assets, which primarily consist of property and equipment, goodwill, and other intangible assets, are not required to be carried at fair value on a recurring basis and are reported at carrying value. The fair values of these assets were determined based on Level 3 measurements, including estimates of the amount and timing of future cash flows based upon historical experience, expected market conditions, and management’s plans. The Company recorded write-offs for a discontinued project and impairments to reduce the carrying values of goodwill associated with certain reporting units and certain retail store assets to zero as follows:
The Company’s goodwill is reported within its Europe operating segment. |
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Derivative Financial Instruments |
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Financial Instruments | DERIVATIVE FINANCIAL INSTRUMENTS The Company transacts business in various foreign countries and is therefore exposed to foreign currency exchange rate risk that impacts the reported U.S. Dollar amounts of revenues, costs, and certain foreign currency monetary assets and liabilities. In order to manage exposure to fluctuations in foreign currency and to reduce the volatility in earnings caused by fluctuations in foreign exchange rates, the Company enters into forward contracts to buy and sell foreign currency. By policy, the Company does not enter into these contracts for trading purposes or speculation. Counterparty default risk is considered low because the forward contracts that the Company enters into are over-the-counter instruments transacted with highly-rated financial institutions. The Company was not required to and did not post collateral as of December 31, 2017 or 2016. The Company’s derivative instruments are recorded at fair value as a derivative asset or liability in the consolidated balance sheets. The Company reports derivative instruments with the same counterparty on a net basis when a master netting arrangement is in place. Changes in fair value are recognized within ‘Foreign currency gain (loss), net’ in the consolidated statements of operations. For the consolidated statements of cash flows, the Company classifies cash flows from derivative instruments at settlement in the same category as the cash flows from the related hedged items within ‘Cash provided by operating activities.’ Results of Derivative Activities The fair values of derivative assets and liabilities, net, all of which are classified as Level 2, reported within ‘Accrued expenses and other liabilities’ in the consolidated balance sheets were:
The notional amounts of outstanding foreign currency forward exchange contracts shown below report the total U.S. Dollar equivalent position and the net contract fair values for each foreign currency position.
Amounts reported in ‘Foreign currency gain (loss), net’ in the consolidated statements of operations include both realized and unrealized gains (losses) from foreign currency transactions and derivative contracts and were as follows:
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Revolving Credit Facility and Bank Borrowings |
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revolving Credit Facility and Bank Borrowings | REVOLVING CREDIT FACILITY AND BANK BORROWINGS The Company’s borrowings were as follows:
Senior Revolving Credit Facility In December 2011, the Company entered into a revolving credit facility (the “Facility”), pursuant to an Amended and Restated Credit Agreement (as amended, the “Credit Agreement”), with the lenders named therein and PNC Bank, National Association (“PNC”), as a lender and administrative agent for the lenders. The Credit Agreement, as amended, contains certain covenants that restrict certain actions by the Company, including (i) payment of dividends and limitations on: (ii) stock repurchases to $50.0 million per year, subject to certain restrictions; and (iii) capital expenditures and commitments to $50.0 million per year. The Credit Agreement also permits intercompany loans of up to $375.0 million and requires the Company to meet certain financial covenant ratios that become effective when average outstanding borrowings under the Credit Agreement, including letters of credit, exceed the lesser of $40.0 million or 40% of the total commitments during certain periods or if the outstanding borrowings exceed the borrowing base. If the financial covenant ratios are in effect, the Company must maintain a minimum fixed charge coverage ratio of 1.10 to 1.00, and a maximum leverage ratio of 2.00 to 1.00. As of December 31, 2017, the Company was in compliance with all financial covenants. The Facility, as amended, provides for borrowings of up to $100.0 million through February 2021. Borrowings under the Facility for domestic base rate loans, including swing loans, bear interest at a daily base rate plus a margin ranging from 0.50% to 0.75%. Domestic London Interbank Borrowing Rate (“LIBOR”) loans bear interest equal to a LIBOR rate plus a margin ranging from 1.50% to 1.75%. As of December 31, 2017, the total commitments available from the lenders under the Facility were $100.0 million. At December 31, 2017, the Company had no outstanding borrowings and $0.6 million in outstanding letters of credit under the Facility, which reduce the amounts available for borrowing under the terms of the Facility. As of December 31, 2017 and 2016, the Company had $99.4 million and $78.7 million, respectively, of available borrowing capacity under the Facility. In February 2018, the Company entered into an amendment to the Credit Agreement which enables the Company repurchase up to $100 million of its common stock each year, subject to certain restrictions, and increased the limit on cumulative stock repurchases from $350 million to $600 million. Asia Revolving Credit Facilities The Company’s revolving credit facility agreement with HSBC Bank (China) Company Limited, Shanghai Branch (“HSBC”), or the “HSBC Facility,” provides the Company uncommitted dual currency revolving loan facilities of up to 40.0 million Chinese Renminbi (“RMB”), or $6.1 million, with a combined facility limit of RMB 60.0 million, or $9.2 million. As of December 31, 2017 and 2016, borrowings under the HSBC Facility remained suspended at the discretion of HSBC. The HSBC Facility matures in February 2021. For U.S. Dollar loans under the HSBC facility, the interest rate is 2.10% per annum plus LIBOR for three months or any other period as may be determined by HSBC at the end of each three month interest period. For RMB loans under the HSBC Facility, interest equals the one year benchmark lending rate effective on the loan draw-down date set forth by the People’s Bank of China plus 10%, payable on the maturity date of the related loan. The HSBC Facility may be canceled or suspended at any time at the discretion of the lender and contains provisions requiring the Company to maintain compliance with certain restrictive covenants. In January 2018, the Company entered into a revolving credit facility with China Merchants Bank Company Limited, Shanghai Branch (the “CMBC Facility”), which provides the Company a revolving loan facility of up to 30.0 million RMB, or $4.6 million, subject to consent by the lender. The CMBC Facility will mature in January 2019. For RMB loans under the CMBC Facility, interest is based on a benchmark interest rate plus a certain number of basis points upon agreement by the lender and the Company at the time of borrowing. The CMBC Facility may be canceled or suspended at any time by either party. Notes Payable Notes payable incur interest at fixed rates ranging from 1.95% to 2.83% and mature in 2018. The weighted average interest rate on outstanding borrowings as of December 31, 2017 and 2016 was 2.30% and 2.41%, respectively. Maturities The maturities of the Company’s debt and capital lease obligations were:
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Equity |
12 Months Ended |
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Dec. 31, 2017 | |
| Equity [Abstract] | |
| Equity | EQUITY Common Stock The Company has one class of common stock with a par value of $0.001 per share. There are 250 million shares of common stock authorized for issuance. Holders of common stock are entitled to one vote per share on all matters presented to common stockholders. Common Stock Repurchase Program On December 26, 2013, the Board of Directors approved and authorized a program to repurchase up to $350 million of our common stock. The number, price, and timing of the repurchases are at the Company’s sole discretion, subject to certain restrictions on repurchases under the Company’s Revolving Credit Facility, and may be made depending on market conditions, liquidity needs, or other factors. The Company’s Board of Directors may suspend, modify, or terminate the program at any time without prior notice. Share repurchases may be made in the open market or in privately negotiated transactions. The repurchase authorization does not have an expiration date and does not obligate the Company to acquire any amount of its common stock. Under Delaware state law, these shares are not retired, and the issuer has the right to resell any of the shares repurchased. During 2017, the Company repurchased 5.7 million shares of its common stock at a cost of $50.0 million, including commissions. During 2016, the Company did not repurchase any of its common stock. During 2015, the Company repurchased 6.5 million shares at a cost of $85.9 million including commissions. As of December 31, 2017, the Company had remaining authorization to repurchase approximately $68.8 million of its common stock, subject to restrictions under its Credit Agreement. On February 20, 2018, the Board increased the repurchase authorization to $500.0 million of our common stock. Preferred Stock The Company has authorized and available for issuance 4.0 million shares of preferred stock. Of these preferred shares, 1.0 million were authorized and 0.2 million were issued and outstanding as of December 31, 2017 and 2016. Series A Convertible Preferred Stock The Company is authorized to issue up to 1.0 million shares of Series A Preferred Stock, par value $0.001 per share, of which 0.2 million shares were issued to Blackstone and certain of its permitted transferees in January 2014. The Series A Preferred Stock has a stated value of $1,000 per share. Participation Rights and Dividends Holders of the Series A Preferred Stock are entitled to receive dividends declared or paid on the Company’s common stock and are entitled to vote together with the holders of the Company’s common stock as a single class, in each case, on an as-converted basis. Holders of the Series A Preferred Stock also have certain limited special approval rights, including with respect to the issuance of pari passu or senior equity securities of the Company. The Series A Preferred Stock ranks senior to the Company’s common stock with respect to rights to preferred dividends, liquidation, winding-up, and dissolution. Holders of Series A Preferred Stock are entitled to cumulative dividends payable quarterly in cash at a rate of 6.0% per annum. If the Company fails to make timely dividend payments, the dividend rate will increase to 8.0% per annum until such time as all accrued but unpaid dividends have been paid in full. As of December 31, 2017 and 2016, the Company had accrued preferred dividends of $3.0 million, which are reported in ‘Accrued expenses and other liabilities’ in the consolidated balance sheets. These accrued dividends were paid in cash in January 2018 and 2017, respectively. Conversion Rights of the Company and Blackstone The Series A Preferred Stock is convertible at the option of the holders at any time into shares of common stock at a conversion price of $14.50 per share, subject to adjustment for customary anti-dilution provisions. Provided the closing price of the Company’s common stock has been equal to or greater than $29.00 for 20 consecutive trading days, the Company may elect to convert all or a portion of the Series A Preferred Stock into an equivalent number of shares of common stock. At December 31, 2017, had the holders converted or the Company been entitled to exercise its conversion right, the Series A Preferred Stock would have been convertible into 13,793,100 shares of common stock. Redemption Rights of the Company and Blackstone The Company has the option to redeem the Series A Preferred Stock anytime on or after January 27, 2022, for 100% of the stated redemption value of $200 million plus all accrued and unpaid dividends. Blackstone has the option to cause the redemption of the Series A Preferred Stock any time after January 27, 2022, or upon a change in control. Further, upon certain change of control events, Blackstone can require the Company to repurchase the Series A Preferred Stock at 101% of the redemption value plus all accrued and unpaid dividends. The carrying value of the Series A Preferred Stock is accreted up to its $200 million redemption value on a straight-line basis through the redemption date. Beneficial Conversion Feature The Company’s Series A Convertible Preferred Stock (“Series A Preferred Stock”) included a beneficial conversion feature. The Company recognized the beneficial conversion feature in additional paid-in capital. Accretion expense is recorded over the eight years from the date of issuance through the redemption date utilizing the effective interest method. |
Share-based Compensation |
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| Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based Compensation | SHARE-BASED COMPENSATION The Company’s share-based compensation awards are issued under the 2015 Equity Incentive Plan (“2015 Plan”) and two predecessor plans, the 2005 Equity Incentive Plan (“2005 Plan”) and the 2007 Equity Incentive Plan (“2007 Plan”). Any awards that expire or are forfeited under the 2007 Plan become available for issuance under the 2015 Plan. The Company accounts for forfeitures as they occur when calculating share-based compensation expense. The aforementioned plans provide for the issuance of previously unissued common stock in connection with the exercise of stock options and conversion of other share-based awards. There were 3,511,206 shares of common stock reserved and authorized for issuance at December 31, 2017, under all plans, subject to adjustment for future stock splits, stock dividends, and similar changes in capitalization. Share-Based Compensation Expense Pre-tax share-based compensation expense reported in the Company’s consolidated statements of operations was as follows:
Stock Option Activity Stock option activity during the year ended December 31, 2017 was:
During the years ended December 31, 2017 and 2015, stock options were valued using a Black Scholes option pricing model using the following assumptions. No stock options were granted during 2016.
The weighted average grant date fair value of stock options granted during the years ended December 31, 2017 and 2015 was approximately $2.37 and $4.74 per share, respectively. The aggregate intrinsic value of stock options exercised during the years ended December 31, 2017, 2016, and 2015 was $0.1 million, $0.5 million, and $1.7 million, respectively. During the years ended December 31, 2017, 2016, and 2015, the Company received $0.1 million, $0.4 million and $1.9 million cash in connection with the exercise of stock options. The total grant date fair value of stock options vested during the years ended December 31, 2017, 2016, and 2015 was $0.1 million, $0.3 million, and $0.7 million, respectively. As of December 31, 2017, the Company had $0.5 million of total unrecognized share-based compensation expense related to unvested options, which is expected to be amortized over the remaining weighted average period of 2.29 years. Stock options under the 2005 Plan, 2007 Plan, and 2015 Plan generally vest ratably over four years with the first vesting occurring one year from the date of grant, followed by monthly vesting for the remaining three years, and expire ten years after the date of grant. Restricted Stock Awards and Restricted Stock Units Activity From time to time, restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) are granted to employees. RSAs and RSUs generally vest over three years, depending on the terms of the grant. Holders of unvested RSAs have the same rights as those of common stockholders including voting rights and non-forfeitable dividend rights. However, ownership of unvested RSAs cannot be transferred until vested. Holders of unvested RSUs have a contractual right to receive a share of common stock upon vesting. RSUs have dividend equivalent rights which accrue over the term of the award and are paid if and when the RSUs vest, but RSU holders have no voting rights. The Company grants both time-based RSUs and performance-based RSUs. Time-based RSUs are typically granted on an annual basis to certain executive and non-executive employees and vest on a straight-line basis in three annual installments, beginning one year after the grant date. During the years ended December 31, 2017, 2016, and 2015, the Board approved grants of 1.1 million, 1.0 million, and 1.2 million time-based RSUs, respectively. Performance-based RSUs are granted on an annual basis to certain executive employees and consist of a time-based and performance-based component. Under the time-based component, RSUs vest at the end of each of the three years, beginning one year from the grant date. The performance targets and vesting conditions for performance-based RSUs are based on achievement of multiple weighted performance goals, and vest upon certification by the compensation committee plus an additional service period. The fair value of performance-based awards is estimated using a Monte Carlo simulation valuation model. This pricing model utilizes multiple input variables that determine the probability of satisfying each performance condition stipulated in the terms of the award to estimate its grant date fair value. Compensation expense, net of forfeitures, is updated for the Company’s expected performance level against each related goal at the end of each reporting period. During the years ended December 31, 2017, 2016, and 2015, the Board approved the grant of 1.3 million, 1.2 million, and 1.5 million RSUs, respectively, to certain executive employees as part of the performance incentive program. RSA and RSU activity during the year ended December 31, 2017 was:
RSAs vested during the years ended December 31, 2017, 2016, and 2015 consisted entirely of time-based awards. The total grant date fair value of RSAs vested was $0.2 million in each of the years ended December 31, 2017, 2016, and 2015. As of December 31, 2017, unrecognized share-based compensation expense for RSAs was $0.1 million, which is expected to amortize over a remaining weighted average period of 0.43 years. RSUs vested during the year ended December 31, 2017 consisted of 696,083 time-based awards and 68,317 performance-based awards. RSUs vested during the year ended December 31, 2016 consisted of 599,071 time-based awards and 31,396 performance-based awards. RSUs vested during the year ended December 31, 2015 consisted of 437,132 time-based awards and 67,893 performance-based awards. The total grant date fair value of RSUs vested during the years ended December 31, 2017, 2016, and 2015 was $8.3 million, $8.0 million and $8.2 million, respectively. As of December 31, 2017, unrecognized share-based compensation expenses for time-based and performance-based RSUs were $9.9 million and $3.8 million, respectively, and are expected to amortize over a remaining weighted average period of 1.56 years and 1.94 years, respectively. |
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Income Taxes |
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| Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Taxes | INCOME TAXES U.S. Federal Income Tax Reform On December 22, 2017, H.R. 1, also known as the Tax Cuts and Jobs Act (“Tax Act”), was enacted in the U.S. This enactment resulted in a number of significant changes to U.S. federal income tax law for U.S. corporations. Most notably, the statutory U.S. federal corporate income tax rate was changed from 35% to 21% for corporations. In addition to the change in the corporate income tax rate, the Tax Act further introduced a number of other changes including a one-time transition tax via a mandatory deemed repatriation of post-1986 undistributed foreign earnings and profits; the introduction of a tax on global intangible low-taxed income (“GILTI”) for tax years beginning after December 31, 2017; the limitation of deductible net interest to 30% of adjustable taxable income; the further limitation of the deductibility of share-based compensation of certain highly compensated employees; the ability to elect to accelerate bonus depreciation on certain qualified assets; and the Base Erosion and Anti-Abuse Tax ("BEAT"), amongst other changes. Additionally, on December 22, 2017, the Securities and Exchange Commission staff issued Staff Accounting Bulletin No. 118 ("SAB 118") to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. Specifically, SAB 118 provides a measurement period for companies to evaluate the impacts of the Tax Act on their financial statements. This measurement period may not exceed one year and begins in the reporting period that includes the enactment date and ends when an entity has obtained, prepared, and analyzed the information necessary to complete the accounting requirements. Transition Tax The Tax Act requires us to pay U.S. income taxes on accumulated foreign subsidiary earnings not previously subject to U.S. income tax. We have recorded provisional amounts based on estimates of the effects of the Tax Act as the analysis requires significant data from our foreign subsidiaries that is not regularly collected or analyzed. The U.S. federal transition tax liability, net of newly generated income tax credits, is an obligation of $17.1 million. The Company has existing foreign tax credits and other attributes which fully offset this transition tax obligation. The associated deferred tax assets that offset the obligation have a full valuation allowance, so there is no net impact to income tax expense. Deferred Tax Effects The Tax Act reduces the U.S. statutory tax rate from 35% to 21% for years after 2017. Accordingly, we have remeasured our deferred tax positions as of December 31, 2017 to reflect the reduced rate that will apply in future periods when these deferred taxes are settled or realized. The remeasurement resulted in a net decrease in deferred tax assets of $0.6 million and a $0.1 million change in the valuation allowance. Therefore, we recognized a deferred tax expense of $0.7 million to reflect the reduced U.S. tax rate and other effects of the Tax Act. We have not collected the necessary data to complete our analysis of the effect of the Tax Act on the underlying deferred taxes and as such, the amounts recorded as of December 31, 2017 are provisional. The net tax expense recognized in 2017 related to the Tax Act which was not offset by a change in valuation allowance was $0.7 million. As we complete our analysis of the impacts of the Tax Act and incorporate additional guidance that may be issued by the U.S. Treasury Department, the IRS, or other standard-setting bodies, we may identify additional effects not reflected as of December 31, 2017. Additionally, we consider these amounts preliminary as we continue to evaluate the impacts of the Tax Act and further understand its implications, as well as the related, and yet to be issued, regulator rules, regulations, and interpretations. For example, subsequent to the enactment, the FASB staff has concluded that companies should make an accounting policy election to account for the tax effects of GILTI either as a component of income tax expense in the future period the tax arises, or as a component of deferred taxes on the related investments in foreign subsidiaries. We are currently evaluating the GILTI provisions of the Tax Act and the related implications and have not finalized our accounting policy election; however, we have preliminarily concluded that we will record GILTI provisions as a periodic expense as incurred and, therefore, have not recorded deferred taxes for GILTI as of December 31, 2017. We will continue to evaluate in future periods and will finalize our accounting policy election at that time. Additional impacts of the Tax Act will be recorded as they are identified during the measurement period pursuant to SAB 118. Any adjustments to provisional amounts that are identified during the measurement period will be recorded and disclosed in the reporting period in which the adjustment is determined. The complexity of the Tax Act could necessitate the need to use the full one year measurement period to adequately interpret, analyze, and conclude upon the tax effects of the Tax Act as of the enactment date. Finally, BEAT is a new minimum tax on international payments as a means to reduce the ability of multi-national companies to erode the U.S. tax base through deductible related-party payments. We do not have any material deductible related party payments originating from the U.S. to our foreign subsidiaries that this would apply to. As a result, BEAT is not expected to have a material impact on our income tax expense. Income Taxes The following table sets forth income before taxes and the expense for income taxes:
The following table sets forth income reconciliations of the statutory federal income tax rate to actual rates based on income or loss before income taxes:
Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. We recorded a provisional adjustment to our U.S. deferred income taxes as of December 31, 2017 to reflect the reduction in the U.S. statutory tax rate from 35% to 21% resulting from the Tax Act. The following table sets forth deferred income tax assets and liabilities as of the date shown:
During 2017, additional valuation allowances of $28.6 million were recorded on deferred tax assets that are not anticipated to be realized. The change in the valuation allowance includes $24.4 million related to income tax expense and $4.2 million which does not impact the tax provision because this amount reflects the impact of unrecorded tax attributes related to changes in cumulative translation adjustment. During 2016, additional valuation allowances of $34.3 million were recorded. The change in the 2016 valuation allowance includes $16.0 million related to income tax expense and $18.3 million which does not impact the tax provision because this amount reflects the cumulative impact of unrecorded tax attributes related to the adoption in 2016 of U.S. GAAP guidance related to income tax effect of share-based compensation and changes in cumulative translation adjustment. We annually receive cash from our foreign subsidiaries’ current year earnings. The transition tax in the Tax Act imposes a tax on undistributed and previously untaxed foreign earnings at various tax rates. This tax largely eliminated the differences between the financial reporting and income tax basis of foreign undistributed earnings. As a result of the transition tax, the Company no longer has a deferred tax liability associated with undistributed earnings and profits. Furthermore, as of December 31, 2017, foreign withholding taxes have not been provided on unremitted earnings of subsidiaries operating outside of the U.S. as these amounts are considered to be indefinitely reinvested. During 2017, we recorded additional tax loss carryforwards in certain foreign jurisdictions which aggregate to $18.8 million, primarily driven by operational losses recognized based on local statutory accounting requirements. As these carryforwards were generated in jurisdictions where we have historically had book losses or do not have strong future projections related to those operations, we concluded that it was more likely than not that the associated net operating losses would not be realized, and thus recorded a valuation allowance on the majority of the associated deferred tax assets. As of December 31, 2017, Crocs maintains a valuation allowance of $119.5 million. The following table sets forth a reconciliation of the beginning and ending amount of unrecognized tax benefits:
The Company recorded a net expense of $1.5 million related to increases in 2017 unrecognized tax benefits combined with amounts effectively settled under audit. Unrecognized tax benefits as of December 31, 2017 relate to tax years that are currently open under the statute of limitation. The primary impact of uncertain tax positions on the rate reconciliation includes audit settlements, net increases in position changes, and accrued interest expense. Interest and penalties related to income tax liabilities are included in ‘Income tax expense’ in the consolidated statement of operations. For the years ended December 31, 2017, 2016, and 2015, Crocs recorded approximately $0.2 million, $0.2 million, and $0.2 million, respectively, of penalties and interest. During the year ended December 31, 2017, Crocs released $0.2 million of interest from settlements, lapse of statutes, and change in certainty. The cumulative accrued balance of penalties and interest was $0.7 million, $0.6 million, and $0.5 million, as of December 31, 2017, 2016, and 2015, respectively. Unrecognized tax benefits of $6.2 million, $4.8 million and $5.0 million as of December 31, 2017, 2016, and 2015, respectively, if recognized, would reduce the annual effective tax rate offset by deferred tax assets recorded for uncertain tax positions. The following table sets forth the tax years subject to examination for the major jurisdictions where we conduct business as of December 31, 2017:
The Company is currently under audit in Taiwan. U.S state tax returns are generally subject to examination for a period of three to five years after filing of the respective return. The state impact of any federal changes remains subject to examination by various state jurisdictions for a period up to two years after formal notification to the states. As such, U.S. state income tax returns for the Company are generally subject to examination for the years 2012 to 2017. The Company has recorded deferred tax assets related to U.S. federal tax carryforwards, including foreign tax credits and net operating losses, which expire at various dates between 2023 and 2037 of $48.6 million and $57.3 million at December 31, 2017 and 2016, respectively. The Company has recorded deferred tax assets related to U.S. state tax net operating loss carryforwards which expire at various dates between 2017 and 2037 of $12.5 million and $9.4 million at December 31, 2017 and 2016, respectively. The Company has recorded deferred tax assets related to foreign tax carryforwards, including foreign tax credits and net operating losses, which expire starting in 2021 and those which do not expire of $49.5 million and $39.3 million as of December 31, 2017 and 2016, respectively. |
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Earnings Per Share |
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| Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share | EARNINGS PER SHARE Basic and diluted EPS for the years ended December 31, 2017, 2016, and 2015 were as follows:
For the years ended December 31, 2017, 2016, and 2015, respectively, all outstanding shares issued under share-based compensation awards, and all potentially convertible Series A Preferred Stock shares were excluded from the calculation of diluted EPS because the effect was anti-dilutive. If converted, Series A Preferred Stock would represent approximately 16.7% of the Company’s common stock outstanding, or 13.8 million additional common shares as of December 31, 2017. |
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Commitments And Contingencies |
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| Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments And Contingencies | COMMITMENTS AND CONTINGENCIES Rental Commitments and Contingencies The Company rents retail stores, offices and warehouses, vehicles, and equipment under operating leases expiring at various dates through 2033. Rent expense for leases with escalations or rent holidays is recognized on a straight-line basis over the lease term beginning on the lease inception date. Certain leases also provide for contingent rents, which are generally determined as a percent of sales in excess of specified levels. A contingent rent liability is recognized together with the corresponding rent expense when specified levels have been achieved or when the Company determines that achieving the specified levels during the period is probable. Future minimum lease payments under operating leases as of the date shown were as follows:
Minimum sublease rental income of $0.2 million under non-cancelable subleases, and contingent rentals, which may be paid under certain retail store leases on a basis of percentage of sales in excess of stipulated amounts, are excluded from the commitment schedule. Rent expense under operating leases was as follows:
(1) Minimum rentals include all lease payments as well as fixed and variable common area maintenance, parking, and storage fees, which were approximately $10.0 million, $10.2 million, and $9.1 million during the years ended December 31, 2017, 2016, and 2015, respectively. Purchase Commitments Under the terms of an annual supply agreement, the Company guarantees payment for certain third-party manufacturer purchases of raw materials used in the manufacture of its products, up to a maximum of €3.5 million (approximately $4.2 million as of December 31, 2017). As of December 31, 2017 and 2016, the Company had purchase commitments with other third-party manufacturers, primarily for materials and supplies used in the manufacture of the Company’s products, for an aggregate of $122.7 million and $125.9 million, respectively. Government Tax Audits The Company is regularly subject to, and is currently undergoing, audits by various tax authorities in the United States and several foreign jurisdictions, including customs duties, import and other taxes for prior tax years. See Note 15 — Legal Proceedings for additional information. Other During its normal course of business, the Company may make certain indemnities, commitments, and guarantees under which it may be required to make payments in relation to certain matters. The Company cannot determine a range of estimated future payments and has not recorded any liability for such payments in the accompanying consolidated balance sheets. See Note 15 — Legal Proceedings for further details regarding potential loss contingencies related to government tax audits and other current legal proceedings. |
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Operating Segments and Geographic Information |
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| Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating Segments and Geographic Information | OPERATING SEGMENTS AND GEOGRAPHIC INFORMATION The Company has three reportable operating segments: the Americas, Asia Pacific, and Europe. ‘Other businesses’ aggregates insignificant operating segments that do not meet the reportable segment threshold, including manufacturing operations located in Mexico and Italy, and corporate operations. Each of the reportable operating segments derives its revenues from the sale of footwear and accessories to external customers. Revenues for ‘Other businesses’ include non-footwear product sales to external customers that are excluded from the measurement of segment operating revenues and income. Segment performance is evaluated based on segment results without allocating corporate expenses, or indirect general, administrative, and other expenses. Segment profits or losses include adjustments to eliminate inter-segment sales. Reconciling items between segment operating income and income (loss) from operations consist of other businesses and unallocated corporate expenses, as well as inter-segment eliminations. The following tables set forth information related to reportable operating segments:
(1) Includes $0.5 million, $1.7 million, and $7.2 million of asset impairment charges related to 3, 12, and 27 underperforming retail locations for the years ended December 31, 2017, 2016 and 2015, respectively. (2) Includes $0.0 million, $0.7 million, and $0.7 million of asset impairment charges related to 0, 21, and 27 underperforming retail locations for the years ended December 31, 2017, 2016 and 2015, respectively. (3) Includes less than $0.1 million, $0.3 million, and $1.6 million of asset impairment charges related to 1, 9, and 21 underperforming retail locations for the years ended December 31, 2017, 2016 and 2015, respectively. Additionally in the year ended December 31, 2016, the Company recorded $0.4 million in impairment charges related to goodwill in our Europe operating segment. (4) Includes a $4.8 million write-off related to a discontinued project for the year ended December 31, 2017. Also includes corporate support and administrative functions, costs associated with share-based compensation, research and development, marketing, legal, restructuring, depreciation and amortization of corporate and other assets not allocated to operating segments, and intersegment eliminations. The following table sets forth asset information related to reportable operating segments as of the dates shown:
There were no customers who represented 10% or more of consolidated revenues during the years ended December 31, 2017, 2016 and 2015. The following table sets forth certain geographical information regarding Crocs’ revenues for the periods as shown:
(1) For the year ended December 31, 2016, sales in Japan represented approximately 10.6% of consolidated revenues. The following table sets forth geographical information regarding property and equipment assets as of the dates shown:
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Legal Proceedings |
12 Months Ended |
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Dec. 31, 2017 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| Legal proceedings | LEGAL PROCEEDINGS The Company was subjected to an audit by the Brazilian Federal Tax Authorities related to imports of footwear from China between 2010 and 2014. On January 13, 2015, the Company was notified about the issuance of assessments totaling 14.4 million Brazilian Real (“BRL”), or approximately $4.3 million, plus interest and penalties, for the period January 2010 through May 2011. The Company has disputed these assessments and asserted defenses to the claims. On February 25, 2015, the Company received additional assessments totaling 33.3 million BRL, or approximately $10.1 million, plus interest and penalties, related to the remainder of the audit period. The Company has also disputed these assessments and asserted defenses to these claims in administrative appeals. On August 29, 2017, the Company received a favorable ruling on its appeal of the first assessment, which dismissed all fines, penalties, and interest. The tax authorities have requested a special appeal to that decision. If the appeal is accepted, Crocs will have the opportunity to both defend the appeal as well as challenge it procedurally. Should the Brazilian Tax Authority prevail in this final administrative appeal, Crocs may still challenge the assessments through the court system, which would likely require the posting of a bond. Additionally, the second appeal for the remaining assessments is scheduled to be heard on March 1, 2018. The Company has not recorded these items within the consolidated financial statements. Due to the inherent uncertainty of litigation and legal challenges, it is not possible to accurately predict the timing or outcome of this matter or to estimate an amount of loss, if any. For all other claims and other disputes, the Company has accrued estimated losses of $1.8 million within ‘Accrued expenses and other liabilities’ in its consolidated balance sheet as of December 31, 2017. Where the Company is able to estimate possible losses or a range of possible losses, the Company estimates that as of December 31, 2017, losses associated with these claims and other disputes are immaterial. The Company is subject to other litigation from time to time in the ordinary course of business, including employment, intellectual property and product liability claims. The Company is not party to any other pending legal proceedings that it believes would reasonably have a material adverse impact on its business, financial position, results of operations, or cash flows. |
Employee Benefit Plan |
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Dec. 31, 2017 | |
| Retirement Benefits [Abstract] | |
| Pension and Other Postretirement Benefits Disclosure [Text Block] | EMPLOYEE BENEFIT PLAN Defined Contribution Plan The Company sponsors a qualified defined contribution benefit plan (the “Plan”), covering substantially all of its U.S. employees. The Plan includes a savings plan feature under Section 401(k) of the Internal Revenue Code. The Company makes matching contributions to the plans equal to 100% of the first 3%, and up to 50% of the next 2% of salary contributed by an eligible employee. Participants are vested 100% in the Company’s matching contributions when made. Contributions made by the Company under the Plan were $5.5 million, $5.8 million and $6.0 million for the years ended December 31, 2017, 2016, and 2015, respectively. |
Unaudited Quarterly Consolidated Financial Information |
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| Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Unaudited Quarterly Consolidated Financial Information | UNAUDITED QUARTERLY CONSOLIDATED FINANCIAL INFORMATION
During the three months ended December 31, 2017, we identified the following factors affecting the comparability of information between periods:
During the three months ended December 31, 2016 we identified the following factors affecting the comparability of information between periods:
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Schedule II - Valuation and Qualifying Accounts |
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| Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Valuation and Qualifying Accounts Disclosure [Text Block] | SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS CROCS, INC. AND SUBSIDIARIES
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Basis of Presentation and Summary of Significant Accounting Policies (Policies) |
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| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
| Basis of Presentation | Unless otherwise noted in this report, any description of “the Company,” “Crocs,” “we,” “us,” or “our” includes Crocs, Inc. and its consolidated subsidiaries within our reportable operating segments and corporate operations. The Company is engaged in the design, development, manufacturing, worldwide marketing, distribution, and sale of casual lifestyle footwear and accessories for men, women, and children. We strive to be the global leader in the sale of molded footwear characterized by functionality, comfort, color, and lightweight design. Our reportable operating segments include: the Americas, operating in North and South America; Asia Pacific, operating throughout Asia, Australia, New Zealand, Africa, and the Middle East; and Europe, operating throughout Western Europe, Eastern Europe, and Russia. |
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| Principles of Consolidation | Basis of Presentation and Consolidation The Company’s consolidated financial statements include its accounts and those of its wholly-owned subsidiaries, and reflect all adjustments which are necessary for a fair statement of financial position, results of operations, and cash flows for the periods presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany balances and transactions have been eliminated in consolidation. |
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| Use of Estimates | Use of Estimates Our consolidated financial statements are prepared in accordance with U.S. GAAP. These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions used to determine certain amounts that affect the financial statements are reasonable, based on information available at the time they are made. Management believes that the estimates, judgments, and assumptions made when accounting for items and matters such as, but not limited to, the allowance for doubtful accounts, customer rebates, sales returns, impairment assessments and charges, recoverability of assets (including deferred tax assets), uncertain tax positions, income tax expense, share-based compensation expense, the assessment of lower of cost or net realizable value on inventory, useful lives assigned to long-lived assets, depreciation, and provisions for contingencies are reasonable based on information available at the time they are made. Management also makes estimates in the assessments of potential losses in relation to tax matters and threatened or pending legal proceedings (see Note 11 — Income Taxes and Note 15 — Legal Proceedings).To the extent there are differences between these estimates and actual results, our consolidated financial statements may be materially affected. |
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| Reclassifications | Reclassifications The Company has reclassified certain amounts on the consolidated statements of operations, consolidated balance sheets, consolidated statements of cash flows, and Note 7 — Derivative Financial Instruments to conform to current period presentation. |
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| Transactions with Affiliates | Transactions with Affiliates The Company receives services from three subsidiaries of Blackstone Capital Partners VI L.P. (“Blackstone”). Blackstone and certain of its permitted transferees currently beneficially own all the outstanding shares of the Company’s Series A Convertible Preferred Stock, which is convertible into approximately 16.7% of the Company’s common stock as of December 31, 2017. Blackstone also has the right to nominate two representatives to serve on the Company’s Board of Directors (the “Board”). Certain Blackstone subsidiaries provide various services to the Company, including inventory count, cybersecurity and consulting, and workforce management services. The Company incurred expenses of $0.7 million, $0.8 million, and $0.9 million for the years ended December 31, 2017, 2016, and 2015 respectively, for these services, which are reported in ‘Selling, general and administrative expenses’ in the consolidated statements of operations. |
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| Revenue Recognition | Revenue Recognition Revenue is recognized when persuasive evidence of an arrangement exists, the significant risks and rewards of ownership, including title and risk of loss, are transferred to the customer or distributor, the collection of the related receivables is probable, and the selling price is fixed or determinable. Title passes on shipment to or on receipt by the customer depending on the country in which the sale occurs and the agreement terms with the customer. We also may accept returns from our wholesale customers, on an exception basis, to ensure that our products are merchandised in the proper assortments. The estimated costs of sales incentives, discounts, returns, price promotions, rebates, and loyalty and coupon programs are reported as a reduction of revenues. |
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| Shipping and Handling Costs and Fees | Shipping and Handling Costs and Fees Shipping and handling costs are expensed as incurred and are included in ‘Cost of sales’ in the consolidated statements of operations. Shipping and handling fees billed to customers are included in revenues. |
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| Taxes Assessed by Governmental Authorities | Taxes Assessed by Governmental Authorities Taxes assessed by governmental authorities that are directly imposed on a revenue transaction, including value added tax, are recorded on a net basis and are therefore excluded from revenues. |
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| Cost of Sales | Cost of Sales Our cost of sales includes costs incurred to design, produce, and ship our footwear. These costs include our raw materials, both direct and indirect labor, shipping and handling including freight costs, utilities, maintenance costs, depreciation, packaging, and other manufacturing overheads and costs. |
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| Research, Design and Development Expenses | Research, Design, and Development Expenses We continue to dedicate significant resources to product design and development based on opportunities we identify in the marketplace. We incurred expenses of $13.4 million, $11.9 million, and $14.0 million in research, design, and development activities for the years ended December 31, 2017, 2016, and 2015, respectively, which are expensed as incurred and are reported in ‘Selling, general and administrative expenses’ in the consolidated statements of operations. |
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| Selling, General and Administrative Expenses | Selling, General and Administrative Expenses Our selling, general and administrative expenses include media advertising (television, radio, print, social, digital), tactical advertising (signs, banners, point-of-sale materials) and promotional costs. Advertising production costs are expensed when the advertising is first run. Advertising communication costs are expensed in the periods that the communications occur. Certain of the Company’s promotional expenses result from payments under endorsement contracts. Expenses under endorsement contracts are expensed on a straight-line basis over the related annual contract terms. Total marketing expenses, inclusive of advertising, production, promotion, and agency expenses, were $59.1 million, $56.0 million, and $58.2 million for the years ended December 31, 2017, 2016, and 2015, respectively. Prepaid advertising and promotional endorsement costs of $7.0 million and $4.5 million, were included in other current assets in the consolidated balance sheets at December 31, 2017 and 2016, respectively. Selling, general and administrative expenses also include costs for our marketing and sales organizations, and other functions including finance, legal, human resources and information technology. Selling, general and administrative expenses consist primarily of labor and outside services, bad debt expense, legal costs, amortization of intangible assets, as well as certain depreciation costs related to non-production equipment and share-based compensation. |
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| Other Income, Net | Other Income, Net Other income, net primarily includes gains and losses associated with activities not directly related to making and selling footwear, as well as certain gains or losses on sales of non-operating assets. |
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| Foreign Currency Gain (Loss), Net and Foreign Currency Translation and Remeasurement | Foreign Currency Translation and Remeasurement The financial position and operating results of the Company’s foreign operations are reported using their respective local currency as the functional currency. The Company recognizes and reports remeasurement gains and losses within ‘Foreign currency gain (loss), net’ in the consolidated statements of operations. Foreign Currency Gain (Loss), Net Foreign currency gain (loss), net includes realized and unrealized foreign exchange gains and losses resulting from remeasurement and settlement of foreign-currency transactions denominated in a currency other than the functional currency of an entity, and realized and unrealized gains and losses on forward foreign exchange derivative contracts. Realized foreign exchange gains and losses are reported in the operating segment in which they occur. Foreign exchange gains and losses on intercompany balances and forward foreign exchange derivative contracts are reported within the Corporate segment. |
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| Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) Our foreign subsidiaries use their foreign currency as their functional currency. Functional currency assets and liabilities are translated into U.S. dollars using exchange rates in effect at the balance sheet date, and revenues and expenses are translated at average exchange rates during the period. Resulting translation gains and losses are reported in other comprehensive income (loss) (“OCI”), until the substantial disposition of a subsidiary, at which time accumulated translation gains or losses are reclassified into net income. Our OCI consists entirely of cumulative translation gains and losses. |
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| Income Taxes and Taxes Assessed by Governmental Authorities | Income Taxes Income taxes are accounted for using the asset and liability method which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of other assets and liabilities. We provide for income taxes at the current and future enacted tax rates and laws applicable in each taxing jurisdiction. We use a two-step approach for recognizing and measuring tax benefits taken or expected to be taken in a tax return and disclosures regarding uncertainties in income tax positions. We recognize interest and penalties related to income tax matters in income tax expense in the consolidated statement of operations. See Note 11 — Income Taxes for further discussion. Taxes Assessed by Governmental Authorities Taxes assessed by governmental authorities that are directly imposed on a revenue transaction, including value added tax, are recorded on a net basis and are therefore excluded from sales. |
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| Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents represent cash and short-term, highly-liquid investments with maturities of three months or less at the date of purchase. The Company reports receivables from credit card companies, if expected to be received within five days, in cash and cash equivalents. |
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| Restricted Cash | Restricted Cash Restricted cash primarily consists of funds to secure certain retail store leases, certain customs requirements, and other contractual arrangements. |
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| Accounts Receivable, net | Accounts Receivable, Net Accounts receivable are recorded at invoiced amounts, net of reserves and allowances. The Company reduces the carrying value for estimated uncollectible accounts based on a variety of factors including the length of time receivables are past due, economic trends and conditions affecting the Company’s customer base, and historical collection experience. Specific provisions are recorded for individual receivables when the Company becomes aware of a customer’s inability to meet its financial obligations. The Company writes off accounts receivable to the reserves when they are deemed uncollectible or, in certain jurisdictions, when legally able to do so. See Item 15, Schedule II for more information. |
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| Inventories | Inventories Inventories are valued at the lower of cost or net realizable value. We regularly evaluate inventory and estimate net realizable value using several assumptions including estimated future demand and market conditions, as well as other observable factors such as current sell-through of the Company’s products, recent changes in product demand, global and regional economic conditions, historical experience selling through liquidation and price discounted channels, and the amount of inventory on hand. If the estimated inventory net realizable value is less than its carrying value, the carrying value is adjusted to net realizable value and the resulting charge is recorded in ‘Cost of sales’ in the consolidated statements of operations. As of December 31, 2017 and 2016, our finished goods inventories accounted for approximately 97.5% and 96.8%, respectively, of our consolidated inventories, with the remaining balance comprised of raw materials and work-in-process. |
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| Property and Equipment, Net | Property and Equipment, Net Property, equipment, furniture, and fixtures are stated at original cost, less accumulated depreciation. Depreciation is provided using the straight-line method over the estimated useful asset lives, which are reviewed periodically and have the following ranges: machinery and equipment: 2 to 5 years; furniture, fixtures, and other: 2 to 10 years. Leasehold improvements are stated at cost and amortized on the straight-line basis over their estimated economic useful lives or the lease term, whichever is shorter. Costs of enhancements or modifications that substantially extend the capacity or useful life of an asset are capitalized and depreciated accordingly. Ordinary repairs and maintenance are expensed as incurred. Depreciation of manufacturing assets is included in cost of sales in our consolidated statements of operations. Depreciation related to corporate, non-product, and non-manufacturing assets is included in ‘Selling, general and administrative expenses’ in our consolidated statements of operations. When property is retired or otherwise disposed of, the cost and accumulated depreciation are removed from our consolidated balance sheets and the resulting gain or loss, if any, is reflected in ‘Income (Loss) from operations’ in the consolidated statements of operations. Properties held under capital lease are depreciated using the straight-line method over the estimated useful life or the lease term, whichever is shorter. |
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| Goodwill and Other Intangible Assets, net | Goodwill and Other Intangible Assets, Net We evaluate the carrying value of our goodwill and indefinite-lived intangible assets for impairment at the reporting unit level at least annually or when an interim triggering event has occurred indicating potential impairment. Our annual test is performed as of the last day of our fiscal fourth quarter. We continuously monitor the performance of our definite-lived intangible assets and evaluate for impairment when evidence exists that certain events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Significant judgments and assumptions are required in such impairment evaluations. Definite-lived intangible assets are stated at cost, less accumulated amortization. Amortization is recorded using the straight-line method over the estimated lives of the assets. Direct costs of acquiring or developing internal-use computer software, including costs of employees, are capitalized and classified within intangible assets. Software maintenance and training costs are expensed in the period incurred. Initial costs associated with internally-developed-and-used software are expensed until it is determined that the project has reached the application development stage, after which subsequent additions, modifications, or upgrades are capitalized to the extent that they add functionality. The Company’s capitalized software consists primarily of enterprise resource system software, warehouse management software, and point of sale software. Amortization for software is provided using the straight-line method over the estimated useful asset lives, which are reviewed periodically and range from 2 to 7 years. Amortization of capitalized software used in manufacturing activities is included in ‘Cost of sales’ in the consolidated statements of operations. Amortization related to corporate, non-product, and non-manufacturing assets, such as the Company’s global information systems, is included in ‘Selling, general, and administrative expenses’ in the consolidated statements of operations. Amortization for patents, copyrights, and trademarks is provided using the straight-line method over the estimated useful asset lives, which are reviewed periodically and range from 7 to 25 years. |
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| Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets to be held and used are evaluated for impairment when events or circumstances indicate the carrying value of a long-lived asset or asset group is less than the undiscounted cash flows from its use and eventual disposition over its remaining economic life. The Company assesses recoverability by comparing the sum of projected undiscounted cash flows from the use and eventual disposition over the remaining economic life of a long-lived asset or asset group to its carrying value, and records a loss from impairment if the carrying value is more than its undiscounted cash flows. For assets involved in Crocs’ retail business, the asset group is at the retail store level. As retail store performance will vary in new and existing markets due to many factors, including maturity of the market and brand recognition, we periodically evaluate the fixed assets and leasehold improvements related to our retail locations for impairment. Assets or asset groups to be abandoned or from which no future benefit is expected are written down to zero in the period it is determined they will no longer be used and are removed entirely from service. |
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| Share-based Compensation | Share-Based Compensation The Company’s share-based compensation plans provides for stock options, restricted stock, and stock performance awards to be granted to plan participants, which includes certain officers, employees, and members of the Board. The grant date fair value of awards granted under these plans is amortized over the vesting period using the straight-line method. The grant date fair value of stock options is calculated using a Black Scholes option pricing model. The grant date fair value of time-based restricted stock units (“RSUs”) and restricted stock awards (“RSAs”) is based on the closing market price of our common stock on the grant date, adjusted for dividend rights during the vesting period; the grant date fair value of performance-based RSUs is estimated using a Monte Carlo simulation valuation model. Share-based compensation expense associated with manufacturing and retail employees is included in ‘Cost of sales’ in the consolidated statements of operations. Share-based compensation expense associated with selling, marketing, and administrative employees is included in ‘Selling, general and administrative expenses’ in the consolidated statements of operations. |
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| Earnings per Share | Earnings per Share Basic and diluted earnings per common share (“EPS”) is presented using the two-class method. Participating securities are included in the computation of EPS on a pro-rata, if-converted basis. Diluted EPS reflects the potential dilution to common shareholders from securities that could share in the Company’s earnings. The dilutive effect of each participating security, if any, is calculated using the more dilutive of the two-class method described above. Anti-dilutive securities are excluded from diluted EPS. |
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| Derivative Foreign Currency Contracts | Derivative Foreign Currency Contracts The Company enters into foreign currency forward contracts (“contracts”) to mitigate the potential impact of foreign currency exchange rate risk. By policy, the Company does not enter into these contracts for trading purposes or speculation. The fair value of the contracts is reported either as an asset or liability in our consolidated balance sheets. Changes in the fair value of our contracts are recorded in ‘Foreign currency gain (loss), net’ in our consolidated statements of operations. The Company did not designate any derivative instruments for hedge accounting during any of the periods presented. The Company’s derivative instruments are recorded at fair value as a derivative asset or liability in the consolidated balance sheets. The Company reports derivative instruments with the same counterparty on a net basis when a master netting arrangement is in place. Changes in fair value are recognized within ‘Foreign currency gain (loss), net’ in the consolidated statements of operations. For the consolidated statements of cash flows, the Company classifies cash flows from derivative instruments at settlement in the same category as the cash flows from the related hedged items within ‘Cash provided by operating activities. |
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| Fair Value | Fair Value U.S. GAAP for fair value establishes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques (market approach, income approach, and cost approach). The Company utilizes a combination of market and income approaches to value derivative instruments. The Company’s financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels of the hierarchy and the related inputs are as follows:
We categorize fair value measurements within the fair value hierarchy based upon the lowest level of the most significant inputs used to determine fair value. The Company’s non-financial assets, which primarily consist of property and equipment, goodwill, and other intangible assets, are not required to be carried at fair value on a recurring basis and are reported at carrying value. However, on a periodic basis or whenever events or changes in circumstances indicate that their carrying value may not be fully recoverable (and at least annually for goodwill and indefinite-lived intangible assets), non-financial instruments are assessed for impairment and, if applicable, written down to and recorded at fair value. |
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| Recently Accounting Pronouncements | New Accounting Pronouncement Adopted Inventory Measurement In July 2015, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance to measure in-scope inventory at the lower of cost or net realizable value. The Company adopted this guidance on January 1, 2017 on a prospective basis. The adoption did not have a significant effect on our consolidated financial position or results of operations. New Accounting Pronouncements Not Yet Adopted Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In February 2018, the FASB issued authoritative guidance that permits reclassification of the income tax effects of the 2017 U.S. Tax Cuts and Jobs Act (“Tax Act”) on other accumulated comprehensive income (“AOCI”) to retained earnings. This guidance may be adopted retrospectively to each period (or periods) in which the income tax effects of the Tax Act related to items remaining in AOCI are recognized, or at the beginning of the period of adoption. The guidance becomes effective for for annual periods beginning after December 15, 2018, including interim periods within those annual periods, with early adoption permitted. The Company is currently assessing the adoption method and the impact that adopting this new accounting standard will have on its consolidated financial statements. Stock Compensation Scope of Modification Accounting In May 2017, the FASB issued authoritative guidance intended to clarify those changes to terms and conditions of share-based compensation awards that are required to be accounted for as modifications of existing share-based awards. This guidance is to be applied prospectively and becomes effective for annual reporting periods beginning after December 15, 2017, including interim periods within those periods, with early adoption permitted during any interim period. The Company does not expect this standard will have a material impact on the Company’s consolidated financial statements. Clarifying the Definition of a Business In January 2017, the FASB issued authoritative guidance intended to clarify the definition of a business, for purposes of determining whether a business has been acquired or sold, and consequently whether transactions should be accounted for as acquisitions or disposals of a business or as acquisitions or disposals of assets. This guidance is to be applied prospectively and becomes effective for annual reporting periods beginning after December 15, 2017, including interim periods within those periods. The Company does not expect this standard to have a material impact on its consolidated financial statements. Statement of Cash Flows - Classification and Change in Restricted Cash In August 2016, the FASB issued authoritative guidance intended to clarify how entities should classify certain cash receipts and cash payments on the statement of cash flows. Further, in November 2016, the FASB issued guidance requiring that restricted cash be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown in the statement of cash flows. These updates are effective for annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods, with early adoption permitted, and will be applied retrospectively to all periods presented. The Company will implement this standard beginning in the quarter ended March 31, 2018 and the impact will result in a change in financial statement presentation and disclosure within the statement of cash flows. Prepaid Stored-Value Products In March 2016, the FASB issued guidance related to the recognition of breakage for certain prepaid stored-value products. This update aligns recognition of the financial liabilities related to prepaid stored-value products (for example, prepaid gift cards), with Topic 606, Revenue from Contracts with Customers, for non-financial liabilities. In general, certain of these liabilities may be extinguished proportionally in earnings as redemptions occur, or when redemption is remote if issuers are not entitled to the unredeemed stored value. This standard is effective for annual periods (including interim periods) beginning after December 15, 2017, with early adoption permitted. The Company has elected the modified retrospective method of adoption. The Company has completed a review of its prepaid stored-value products and has determined that the impact of adoption is immaterial to the consolidated financial statements. Leases In February 2016, the FASB issued authoritative guidance intended to increase transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet and disclosing key information about leasing arrangements. Under the new guidance, lessees will be required to recognize a right-of-use asset and a lease liability, measured on a discounted basis, at the commencement date for all leases with terms greater than twelve months. Additionally, this guidance will require disclosures to help investors and other financial statement users to better understand the amount, timing, and uncertainty of cash flows arising from leases, including qualitative and quantitative requirements. The guidance should be applied under a modified retrospective transition approach for leases existing at the beginning of the earliest comparative period presented in the adoption-period financial statements. This guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those annual periods, with early adoption permitted. The Company will adopt this guidance beginning with the quarterly reporting period ending March 31, 2019. In July 2017, the Company established an implementation team and engaged external advisers to develop a multi-phase plan to assess the Company’s leasing arrangements, as well as any changes to accounting policies, processes or information systems necessary to adopt the requirements of the new standard. The Company is evaluating the full impact this guidance will have on its consolidated financial statements, and expects that adoption will result in significant increases in lease-related assets and liabilities on its consolidated balance sheet. Revenue Recognition In May 2014, the FASB issued authoritative guidance related to new accounting requirements for the recognition of revenue from contracts with customers. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for the goods or services. Subsequent to the release of this guidance, the FASB has issued additional updates intended to provide interpretive clarifications and to reduce the cost and complexity of applying the new revenue recognition standard both at transition and on an ongoing basis. The new standard and related amendments are effective for annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods. In December 2016, the Company established an implementation team and engaged external advisers to develop a multi-phase plan to assess the Company’s business and contracts, as well as any changes to accounting policies, processes or information systems necessary to adopt the requirements of the new standard. The Company has elected the modified retrospective method of adoption. The Company has completed a review of its revenue contracts and terms and has determined that the impact of adoption is immaterial to the consolidated financial statements. Concurrent with adoption, the Company will change its presentation of product returns in the consolidated balance sheets by reporting an asset for the right to receive returned product and a return liability. In addition, customer payments received in advance of delivery will be reported as a contract liability in the Company’s consolidated balance sheets. The Company will provide additional information along with required disclosures in its consolidated financial statements in its quarterly report for the period ended March 31, 2018. Other Pronouncements Other new pronouncements issued but not effective until after December 31, 2017 are not expected to have a material impact on the Company’s consolidated financial statements. |
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Basis of Presentation and Summary of Significant Accounting Policies (Tables) |
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Supplemental Schedule of Non-Cash Investing and Financing Activities | Consolidated Statements of Cash Flows - Supplemental Schedule of Non-Cash Investing and Financing Activities
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| Fair Value Measurements, Valuation Techniques | The three levels of the hierarchy and the related inputs are as follows:
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Property and Equipment, Net (Tables) |
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Depreciation Expense | Property and equipment, net consists of the following:
Depreciation and amortization expense related to property and equipment, reported in ‘Cost of sales’ and ‘Selling, general and administrative expenses’ was:
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| Schedule of Long-lived Asset Impairments | Long-lived asset impairments by reportable operating segment, were:
(1) In 2015, the Company recorded impairment of nine retail stores in South Africa of $5.7 million. |
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Goodwill and Intangible Assets, Net (Tables) |
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Dec. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Goodwill | All of our goodwill is in the Europe segment. The changes in goodwill for the years ended December 31, 2017 and 2016 were:
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| Schedule of Intangible Assets, net | ‘Intangible assets, net’ reported in the consolidated balance sheets consist of the following:
(1) In the year ended December 31, 2017, we recorded a write-off of $4.8 million for a discontinued project. |
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| Finite-lived Intangible Assets Amortization Expense [Table Text Block] | Amortization expense related to definite-lived intangible assets, reported in ‘Cost of sales’ and ‘Selling, general and administrative expenses’ was:
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| Schedule of Future Amortization of Intangible Assets | Estimated future annual amortization expense of intangible assets is:
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Accrued Expenses And Other Liabilities (Tables) |
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Accrued Expenses and Other Liabilities | Amounts reported in ‘Accrued expenses and other liabilities’ in the consolidated balance sheets were:
(1) Includes customs duty legal accrual liability at December 31, 2016, which was settled in April 2017. (2) Includes current liabilities related to Series A Preferred Stock dividends at December 31, 2017 and 2016. Other accrued liabilities at December 31, 2017 and 2016 also includes net derivative liabilities. |
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Fair Value Measurements (Tables) |
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value of Company's Notes Payable | The fair values of the Company’s outstanding notes payable approximate their carrying values at December 31, 2017 and 2016, based on interest rates currently available to the Company for similar borrowings and were:
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| Fair Value of Company's Non-financial Assets | The fair values of these assets were determined based on Level 3 measurements, including estimates of the amount and timing of future cash flows based upon historical experience, expected market conditions, and management’s plans. The Company recorded write-offs for a discontinued project and impairments to reduce the carrying values of goodwill associated with certain reporting units and certain retail store assets to zero as follows:
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Derivative Financial Instruments (Tables) |
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Fair Values of Derivative Assets and Liabilities | The fair values of derivative assets and liabilities, net, all of which are classified as Level 2, reported within ‘Accrued expenses and other liabilities’ in the consolidated balance sheets were:
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| Summary of Derivative Financial Instruments Notional Amounts on Outstanding Positions | The notional amounts of outstanding foreign currency forward exchange contracts shown below report the total U.S. Dollar equivalent position and the net contract fair values for each foreign currency position.
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| Schedule of Gains / Losses from Foreign Currency Transactions and Derivative Contracts | Amounts reported in ‘Foreign currency gain (loss), net’ in the consolidated statements of operations include both realized and unrealized gains (losses) from foreign currency transactions and derivative contracts and were as follows:
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Revolving Credit Facility and Bank Borrowings (Tables) |
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Components Of Our Consolidated Debt And Capital Lease Obligations | The Company’s borrowings were as follows:
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| Maturities of Debt Obligation | The maturities of the Company’s debt and capital lease obligations were:
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Share-based Compensation (Tables) |
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| Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Share-based Compensation Expense | Pre-tax share-based compensation expense reported in the Company’s consolidated statements of operations was as follows:
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| Stock Option Activity | Stock option activity during the year ended December 31, 2017 was:
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| Schedule of Pricing Model Assumptions | During the years ended December 31, 2017 and 2015, stock options were valued using a Black Scholes option pricing model using the following assumptions. No stock options were granted during 2016.
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| Schedule Of Restricted Stock Award And Restricted Stock Unit Activity | RSA and RSU activity during the year ended December 31, 2017 was:
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Components of Income Tax Expense (Benefit) | The following table sets forth income before taxes and the expense for income taxes:
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| Summary of Tax Expense and Effective Tax Rates | The following table sets forth income reconciliations of the statutory federal income tax rate to actual rates based on income or loss before income taxes:
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| Schedule of Deferred Tax Assets and Liabilities | The following table sets forth income reconciliations of the statutory federal income tax rate to actual rates based on income or loss before income taxes:
Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. We recorded a provisional adjustment to our U.S. deferred income taxes as of December 31, 2017 to reflect the reduction in the U.S. statutory tax rate from 35% to 21% resulting from the Tax Act. The following table sets forth deferred income tax assets and liabilities as of the date shown:
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| Schedule of Unrecognized Tax Benefits Roll Forward | The following table sets forth a reconciliation of the beginning and ending amount of unrecognized tax benefits:
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| Summary of Income Tax Examinations | The following table sets forth the tax years subject to examination for the major jurisdictions where we conduct business as of December 31, 2017:
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Earnings Per Share (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary Of Basic And Diluted Earnings Per Share | Basic and diluted EPS for the years ended December 31, 2017, 2016, and 2015 were as follows:
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Commitments And Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Future Minimum Lease Payments Under Operating Leases | Future minimum lease payments under operating leases as of the date shown were as follows:
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| Operating Lease Rental Expense | Rent expense under operating leases was as follows:
(1) Minimum rentals include all lease payments as well as fixed and variable common area maintenance, parking, and storage fees, which were approximately $10.0 million, $10.2 million, and $9.1 million during the years ended December 31, 2017, 2016, and 2015, respectively. |
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Operating Segments and Geographic Information (Tables) |
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| Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Information Related to Reportable Operating Segments | The following tables set forth information related to reportable operating segments:
(1) Includes $0.5 million, $1.7 million, and $7.2 million of asset impairment charges related to 3, 12, and 27 underperforming retail locations for the years ended December 31, 2017, 2016 and 2015, respectively. (2) Includes $0.0 million, $0.7 million, and $0.7 million of asset impairment charges related to 0, 21, and 27 underperforming retail locations for the years ended December 31, 2017, 2016 and 2015, respectively. (3) Includes less than $0.1 million, $0.3 million, and $1.6 million of asset impairment charges related to 1, 9, and 21 underperforming retail locations for the years ended December 31, 2017, 2016 and 2015, respectively. Additionally in the year ended December 31, 2016, the Company recorded $0.4 million in impairment charges related to goodwill in our Europe operating segment. (4) Includes a $4.8 million write-off related to a discontinued project for the year ended December 31, 2017. Also includes corporate support and administrative functions, costs associated with share-based compensation, research and development, marketing, legal, restructuring, depreciation and amortization of corporate and other assets not allocated to operating segments, and intersegment eliminations. The following table sets forth asset information related to reportable operating segments as of the dates shown:
There were no customers who represented 10% or more of consolidated revenues during the years ended December 31, 2017, 2016 and 2015. The following table sets forth certain geographical information regarding Crocs’ revenues for the periods as shown:
(1) For the year ended December 31, 2016, sales in Japan represented approximately 10.6% of consolidated revenues. The following table sets forth geographical information regarding property and equipment assets as of the dates shown:
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Unaudited Quarterly Consolidated Financial Information (Tables) |
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| Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Unaudited Quarterly Consolidated Financial Information |
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Basis of Presentation and Summary of Significant Accounting Policies - Supplemental Schedule of Noncash Investing and Financing Activities (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
| Supplemental disclosure of cash flow information—cash paid during the period for: | |||
| Accrued purchases of property, equipment, and software | $ 2,195 | $ 2,728 | $ 851 |
| Accretion of dividend equivalents | 3,532 | 3,244 | 2,978 |
| Vendor financed insurance premiums | $ 1,450 | $ 2,082 | $ 0 |
Property and Equipment, Net (Schedule of Property and Equipment) (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
|---|---|---|
| Property, Plant and Equipment [Abstract] | ||
| Machinery and equipment | $ 33,109 | $ 33,163 |
| Leasehold improvements | 72,961 | 73,363 |
| Furniture, fixtures, and other | 19,776 | 19,358 |
| Construction-in-progress | 992 | 6,809 |
| Property and equipment | 126,838 | 132,693 |
| Less: Accumulated depreciation and amortization | (91,806) | (88,603) |
| Property and equipment, net | $ 35,032 | $ 44,090 |
Property and Equipment, Net (Narrative) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
| Property, Plant and Equipment [Line Items] | |||
| Asset retirement obligation | $ 3,100 | $ 2,800 | |
| Gain (loss) on disposal of property and equipment | 800 | (500) | $ (1,400) |
| Retail store asset impairment | 15,271 | ||
| SOUTH AFRICA | |||
| Property, Plant and Equipment [Line Items] | |||
| Additional impairment of assets to be disposed of | 5,700 | ||
| Underperforming Retail Stores | |||
| Property, Plant and Equipment [Line Items] | |||
| Retail store asset impairment | $ 530 | $ 2,713 | $ 9,600 |
Property and Equipment, Net (Schedule of Depreciation and Amortization Expense) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
| Property, Plant and Equipment [Line Items] | |||
| Depreciation | $ 15,001 | $ 15,067 | $ 16,297 |
| Cost of Sales [Member] | |||
| Property, Plant and Equipment [Line Items] | |||
| Depreciation | 2,278 | 1,755 | 1,764 |
| Selling, General and Administrative Expenses [Member] | |||
| Property, Plant and Equipment [Line Items] | |||
| Depreciation | $ 12,723 | $ 13,312 | $ 14,533 |
Property and Equipment, Net (Schedule of Property Impairments) (Details) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
|
Dec. 31, 2017
USD ($)
stores
|
Dec. 31, 2016
USD ($)
stores
|
Dec. 31, 2015
USD ($)
stores
|
|
| Property, Plant and Equipment [Line Items] | |||
| Retail store asset impairment | $ | $ 15,271 | ||
| Number of retail stores impaired | stores | 4 | 42 | 84 |
| Americas [Member] | |||
| Property, Plant and Equipment [Line Items] | |||
| Retail store asset impairment | $ | $ 455 | $ 1,703 | $ 7,237 |
| Number of retail stores impaired | stores | 3 | 12 | 27 |
| Asia Pacific [Member] | |||
| Property, Plant and Equipment [Line Items] | |||
| Retail store asset impairment | $ | $ 0 | $ 672 | $ 6,450 |
| Number of retail stores impaired | stores | 0 | 21 | 36 |
| Europe [Member] | |||
| Property, Plant and Equipment [Line Items] | |||
| Retail store asset impairment | $ | $ 75 | $ 338 | $ 1,584 |
| Number of retail stores impaired | stores | 1 | 9 | 21 |
Goodwill and Intangible Assets, Net (Goodwill) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
| Goodwill and Intangible Assets Disclosure [Abstract] | ||
| Goodwill, net - beginning balance | $ 1,480 | $ 1,973 |
| Foreign currency translation | 208 | (62) |
| Impairment | (431) | |
| Goodwill, net - ending balance | 1,688 | $ 1,480 |
| Accumulated goodwill impairment | $ (800) | |
Goodwill and Intangible Assets, Net (Schedule of Intangible Asset Amortization Expense) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
| Finite-Lived Intangible Assets [Line Items] | |||
| Amortization expense | $ 18,129 | $ 18,976 | $ 19,696 |
| Cost of Sales [Member] | |||
| Finite-Lived Intangible Assets [Line Items] | |||
| Amortization expense | 4,550 | 5,127 | 5,848 |
| Selling, General and Administrative Expenses [Member] | |||
| Finite-Lived Intangible Assets [Line Items] | |||
| Amortization expense | $ 13,579 | $ 13,849 | $ 13,848 |
Goodwill and Intangible Assets, Net (Schedule Of Future Amortization Of Intangible Assets) (Details) $ in Thousands |
Dec. 31, 2017
USD ($)
|
|---|---|
| Goodwill and Intangible Assets Disclosure [Abstract] | |
| 2018 | $ 16,231 |
| 2019 | 14,009 |
| 2020 | 11,306 |
| 2021 | 11,052 |
| 2022 | 603 |
| Thereafter | 522 |
| Net carrying amount of finite-lived intangible assets | $ 53,723 |
Accrued Expenses And Other Liabilities (Schedule Of Accrued Expenses & Other Current Liabilities) (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
|---|---|---|
| Payables and Accruals [Abstract] | ||
| Accrued compensation and benefits | $ 34,955 | $ 20,898 |
| Professional services | 10,835 | 10,900 |
| Accrued rent and occupancy | 8,535 | 7,335 |
| Fulfillment, freight, and duties | 6,921 | 14,572 |
| Royalties payable and deferred revenue | 6,193 | 7,475 |
| Sales/use and value added taxes payable | 3,509 | 4,978 |
| Other | 13,498 | 12,124 |
| Total accrued expenses and other liabilities | $ 84,446 | $ 78,282 |
Derivative Financial Instruments (Fair Value of Derivative Assets and Liabilities) (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
|---|---|---|
| Foreign Currency Derivatives [Abstract] | ||
| Foreign currency forward contract derivatives | $ (406) | $ (157) |
| Level 2 [Member] | ||
| Foreign Currency Derivatives [Abstract] | ||
| Derivative asset | 1,241 | 6,541 |
| Derivative liability | (1,647) | (6,698) |
| Foreign currency forward contract derivatives | $ (406) | $ (157) |
Derivative Financial Instruments (Gains / Losses on Foreign Currency Derivatives) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
| Foreign currency transaction gains | $ 2,284 | $ 10,814 | $ 3,980 |
| Foreign currency forward exchange contracts losses | (1,721) | (13,268) | (7,312) |
| Foreign currency gain (loss), net | $ 563 | $ (2,454) | $ (3,332) |
Revolving Credit Facility and Bank Borrowings (Components Of Our Consolidated Debt And Capital Lease Obligations) (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
|---|---|---|
| Debt Instrument [Line Items] | ||
| Capital lease obligations | $ 44 | $ 49 |
| Total borrowings and capital lease obligations | 706 | 2,378 |
| Less: current portion | 676 | 2,338 |
| Non-current portion | 30 | 40 |
| Notes Payable [Member] | ||
| Debt Instrument [Line Items] | ||
| Notes payable | $ 662 | $ 2,329 |
Revolving Credit Facility and Bank Borrowings (Notes Payable) (Details) - Notes Payable [Member] |
Dec. 31, 2017 |
Dec. 31, 2016 |
|---|---|---|
| Debt Instrument [Line Items] | ||
| Weighted average interest rate (percent) | 2.30% | 2.41% |
| Minimum [Member] | ||
| Debt Instrument [Line Items] | ||
| Notes payable stated interest rate (percent) | 1.95% | |
| Maximum [Member] | ||
| Debt Instrument [Line Items] | ||
| Notes payable stated interest rate (percent) | 2.826% |
Revolving Credit Facility and Bank Borrowings (Maturities Of Debt Obligations) (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
|---|---|---|
| Debt Disclosure [Abstract] | ||
| 2018 | $ 676 | |
| 2019 | 13 | |
| 2020 | 11 | |
| 2021 | 6 | |
| Total borrowings and capital lease obligations | 706 | $ 2,378 |
| Less: current portion | 676 | 2,338 |
| Non-current portion | $ 30 | $ 40 |
Share-based Compensation (Narrative) (Details) |
Dec. 31, 2017
shares
|
|---|---|
| Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
| Shares authorized (shares) | 3,511,206 |
Share-based Compensation (Schedule of Share-based Compensation Expense) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
| Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
| Total share-based compensation expense | $ 9,773 | $ 10,687 | $ 11,236 |
| Cost of Sales [Member] | |||
| Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
| Total share-based compensation expense | 379 | 488 | 539 |
| Selling, General and Administrative Expenses [Member] | |||
| Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
| Total share-based compensation expense | $ 9,394 | $ 10,199 | $ 10,697 |
Share-based Compensation (Pricing Model Assumptions) (Details) |
12 Months Ended | |
|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2015 |
|
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
| Risk-free interest rate - minimum (percent) | 1.50% | |
| Risk-free interest rate - maximum (percent) | 1.72% | |
| Stock Options [Member] | ||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
| Expected volatility | 40.70% | 42.50% |
| Dividend yield | 0.00% | 0.00% |
| Expected life (in years) | 4 years | 4 years |
| Risk-free interest rate (percent) | 1.76% | |
Share-based Compensation (Stock Option Activity Narrative) (Details) - Stock Options [Member] - USD ($) $ / shares in Units, $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
| Weighted average grant date fair value of stock options granted (in dollars per share) | $ 2.37 | $ 4.74 | |
| Aggregate intrinsic value of options exercised | $ 0.1 | $ 0.5 | $ 1.7 |
| Proceeds from options exercised | 0.1 | 0.4 | 1.9 |
| Grant date fair value of options vested in period | 0.1 | $ 0.3 | $ 0.7 |
| Unrecognized share-based compensation expense related to unvested options | $ 0.5 | ||
| Amortized over a weighted average period | 2 years 3 months 15 days | ||
| Options vesting period | 4 years | ||
| Options expiration period | 10 years | ||
| Remaining Years Monthly Vesting [Member] | |||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
| Options vesting period | 3 years | ||
Income Taxes (Components of Income Tax Expense) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
| Income (loss) before taxes: | |||
| U.S. | $ (34,406) | $ (55,617) | $ (83,537) |
| Foreign | 52,586 | 48,404 | 8,793 |
| Income (loss) before income taxes | 18,180 | (7,213) | (74,744) |
| Current income taxes: | |||
| U.S. federal | 1,383 | 49 | 480 |
| U.S. state | 127 | 126 | 195 |
| Foreign | 9,525 | 9,494 | 7,488 |
| Total current income taxes | 11,035 | 9,669 | 8,163 |
| Deferred income taxes: | |||
| U.S. federal | 1,300 | 263 | (3,902) |
| U.S. state | 0 | 0 | (118) |
| Foreign | (4,393) | (651) | 4,309 |
| Total deferred income taxes | (3,093) | (388) | 289 |
| Income tax expense | $ 7,942 | $ 9,281 | $ 8,452 |
Income Taxes (Deferred Income Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
|---|---|---|
| Non-current deferred tax assets: | ||
| Stock compensation expense | $ 2,940 | $ 4,597 |
| Long-term accrued expenses | 20,728 | 26,127 |
| Net operating loss | 42,956 | 36,424 |
| Intangible assets | 1,620 | 3,654 |
| Future uncertain tax position offset | 498 | 396 |
| Unrealized loss on foreign currency | 119 | 0 |
| Foreign tax credit | 67,655 | 69,586 |
| Other | 2,792 | 5,481 |
| Valuation allowance | (119,494) | (90,900) |
| Total non-current deferred tax assets | 19,814 | 55,365 |
| Non-current deferred tax liabilities: | ||
| Intangible assets | 0 | (41) |
| Unremitted earnings of foreign subsidiary | 0 | (32,427) |
| Property and equipment | (9,640) | (16,072) |
| Total non-current deferred tax liabilities | $ 9,640 | $ 48,540 |
Income Taxes (Reconciliation of Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
| Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
| Unrecognized tax benefit as of January 1 | $ 4,750 | $ 4,957 | $ 8,444 |
| Unrecognized tax benefit as of January 1 | 4,750 | 4,957 | 8,444 |
| Gross increases in tax positions in prior period | 1,025 | 646 | 643 |
| Gross decreases in tax positions in prior period | 0 | (664) | (385) |
| Gross increases in tax positions in current period | 966 | 245 | 549 |
| Settlements | (123) | (238) | (4,126) |
| Lapse of statute of limitations | (414) | (196) | (168) |
| Unrecognized tax benefit as of December 31 | $ 6,204 | $ 4,750 | $ 4,957 |
Earnings Per Share (Summary Of Basic And Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
| Earnings Per Share [Abstract] | |||||||||||
| Net loss attributable to common stockholders - basic and diluted | $ (5,294) | $ (31,738) | $ (98,007) | ||||||||
| Weighted average common shares outstanding - diluted (shares) | 72,255 | 73,371 | 75,604 | ||||||||
| Basic (in dollars per share) | $ (0.41) | $ (0.03) | $ 0.21 | $ 0.08 | $ (0.60) | $ (0.07) | $ 0.13 | $ 0.07 | $ (0.07) | $ (0.43) | $ (1.30) |
| Diluted (in dollars per share) | $ (0.41) | $ (0.03) | $ 0.20 | $ 0.08 | $ (0.60) | $ (0.07) | $ 0.13 | $ 0.07 | $ (0.07) | $ (0.43) | $ (1.30) |
Earnings Per Share (Narrative) (Details) - Series A Preferred Stock [Member] |
12 Months Ended |
|---|---|
|
Dec. 31, 2017
shares
| |
| Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
| Percentage of common stock if-converted Series A preferred stock (percent) | 16.70% |
| Series A preferred shares, number of shares issuable if converted (shares) | 13,793,100 |
Commitments And Contingencies (Minimum Future Lease Payments) (Details) $ in Thousands |
Dec. 31, 2017
USD ($)
|
|---|---|
| Commitments and Contingencies Disclosure [Abstract] | |
| 2018 | $ 53,329 |
| 2019 | 36,816 |
| 2020 | 28,547 |
| 2021 | 22,843 |
| 2022 | 16,650 |
| Thereafter | 52,326 |
| Total minimum lease payments | 210,511 |
| Minimum sublease rentals excluded from the commitments schedule | $ 200 |
Commitments And Contingencies (Operating Lease Rental Expense) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
| Operating Leases, Rent Expense, Net [Abstract] | |||
| Minimum rentals | $ 78,961 | $ 88,182 | $ 96,579 |
| Contingent rentals | 14,294 | 14,596 | 14,929 |
| Less: Sublease rentals | (182) | (187) | (322) |
| Total rent expense | 93,073 | 102,591 | 111,186 |
| Common area maintenance, parking and storage. | $ 10,000 | $ 10,200 | $ 9,100 |
Commitments And Contingencies (Purchase Commitments) (Details) $ in Millions |
Dec. 31, 2017
USD ($)
|
Dec. 31, 2017
EUR (€)
|
Dec. 31, 2016
USD ($)
|
|---|---|---|---|
| Purchase Commitment, Excluding Long-term Commitment [Line Items] | |||
| Maximum guaranteed payments for third-party manufacturer purchases | $ 4.2 | € 3,500,000 | |
| Purchase Commitment [Member] | |||
| Purchase Commitment, Excluding Long-term Commitment [Line Items] | |||
| Purchase commitments with third party manufacturers | $ 122.7 | $ 125.9 |
Legal Proceedings (Details) BRL in Millions, $ in Millions |
Feb. 25, 2015
USD ($)
|
Feb. 25, 2015
BRL
|
Jan. 13, 2015
USD ($)
|
Jan. 13, 2015
BRL
|
Dec. 31, 2017
USD ($)
|
|---|---|---|---|---|---|
| Income Tax Examination [Line Items] | |||||
| Assessments sought again entity | BRL | BRL 33.3 | BRL 14.4 | |||
| Accrued estimated losses | $ 1.8 | ||||
| Pending Litigation [Member] | Brazilian Federal Tax Authorities [Member] | |||||
| Income Tax Examination [Line Items] | |||||
| Assessments sought again entity | $ 10.1 | $ 4.3 |
Employee Benefit Plan (Narrative) (Details) - Defined Contribution Plan [Member] - Defined Contribution Benefit Plan [Member] - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
| Defined Contribution Plan Disclosure [Line Items] | |||
| Employees' vesting percentage in matching contributions (percent) | 100.00% | ||
| Contributions made by the Company under the Plan | $ 5.5 | $ 5.8 | $ 6.0 |
| Defined Contribution Plan Tranches One [Member] | |||
| Defined Contribution Plan Disclosure [Line Items] | |||
| Employer matching contribution (percent) | 100.00% | ||
| Employee's salary contribution (percent) | 3.00% | ||
| Defined Contribution Plan Tranches Two [Member] | |||
| Defined Contribution Plan Disclosure [Line Items] | |||
| Employer matching contribution (percent) | 50.00% | ||
| Employee's salary contribution (percent) | 2.00% | ||
Unaudited Quarterly Consolidated Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
| Quarterly Financial Information Disclosure [Abstract] | |||||||||||
| Revenues | $ 199,112 | $ 243,273 | $ 313,221 | $ 267,907 | $ 187,417 | $ 245,888 | $ 323,828 | $ 279,140 | $ 1,023,513 | $ 1,036,273 | $ 1,090,630 |
| Gross profit | 90,367 | 123,463 | 169,807 | 133,584 | 78,724 | 122,434 | 169,640 | 129,366 | 517,221 | 500,164 | 510,805 |
| Income (loss) from operations | (30,377) | 2,685 | 29,446 | 15,582 | (39,787) | (1,215) | 20,605 | 14,243 | 17,336 | (6,154) | (72,324) |
| Net income (loss) | (24,361) | 1,629 | 21,960 | 11,010 | (40,644) | (1,533) | 15,537 | 10,146 | 10,238 | (16,494) | (83,196) |
| Net income (loss) attributable to common shareholders | $ (28,272) | $ (2,263) | $ 18,086 | $ 7,155 | $ (44,482) | $ (5,352) | $ 11,735 | $ 6,361 | $ (5,294) | $ (31,738) | $ (98,007) |
| Basic income (in dollars per share) | $ (0.41) | $ (0.03) | $ 0.21 | $ 0.08 | $ (0.60) | $ (0.07) | $ 0.13 | $ 0.07 | $ (0.07) | $ (0.43) | $ (1.30) |
| Diluted income (in dollars per share) | $ (0.41) | $ (0.03) | $ 0.20 | $ 0.08 | $ (0.60) | $ (0.07) | $ 0.13 | $ 0.07 | $ (0.07) | $ (0.43) | $ (1.30) |
Unaudited Quarterly Consolidated Financial Information Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
| Effect of Fourth Quarter Events [Line Items] | |||||||||||
| Income (loss) from operations | $ (30,377) | $ 2,685 | $ 29,446 | $ 15,582 | $ (39,787) | $ (1,215) | $ 20,605 | $ 14,243 | $ 17,336 | $ (6,154) | $ (72,324) |
| Increase (decrease) in Revenue (percent) | (10.20%) | ||||||||||
| Scenario, Adjustment [Member] | |||||||||||
| Effect of Fourth Quarter Events [Line Items] | |||||||||||
| Income (loss) from operations | 9,400 | ||||||||||
| Charges related to noncash write-off and contract termination fee | $ 6,300 | ||||||||||
| Marketing expense | $ 18,300 | ||||||||||
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